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300.011 - Schmo.L1 Armand Inc vs FRBank New
York
Pocket
Suits Against FRBanks - FR BANKS

REM IN FILES SECTION
ic--SEP i 4 1949
n
A•vr....e—ef
'
.

•
aniteb btate Court of Cu5toini‘ anb Patent ppeal

0,421-

CUSTOMS APPEAL No. 4600.

ARMAND SCHMOLL, INC.,
Appellast,
V.
THE UNITED STATES,
Appellee.

BRIEF OF FEDERAL RESERVE BANK OF NEW
YORK, AMICUS CURIAE.

WALTER S. LOGAN,
Attorney for Federal Reserve Bank
of New York, Amieus Curiae.

RUFUS J. TRIMBLE,
LYON BOSTON,
Of Counsel.

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Pandick Press, Inc., 22 Thames St., New York 6, N. Y., U. S. A.

szec'

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INDEX.

OPINION BELOW

PAGE
1

STATEMENT

QUESTIONS PRESENTED

ARGUMENT

POINT I.—Appellate Jurisdiction should not be
exercised by this Court to review the quashing
by the Customs Court of its subpoena duces
tecum

POINT IL—The rates of foreign exchange determined and certified to the Secretary of the
Treasury by the Federal Reserve Bank of New
York pursuant to section 522(c) of the Tariff
Act of 1930 are final and conclusive and not
subject to judicial review

POINT III.—The United States Customs Court (a)
properly declined to compel the Federal Reserve Bank of New York to disclose its files and
records and other information taken into consideration by it in determining the rates of
foreign exchange certified by it to the Secretary
of the Treasury pursuant to section 522(c) of
the Tariff Act of 1930, and (b) properly affirmed
the decision of the Collector

POINT IV.—The contentions of the appellant are
not supported by the evidence

CONCLUSION

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CITATIONS.
TABLE OF CASES.
PAGE
Amalgamated Textiles, Ltd. v. United States, T. D.
48378, 24 C. C. P. A. (Oust.) 74, 84 Fed. 2d 210
(1936)
5,16
Armand Schmoll, Inc. v. Federal Reserve Bank of
New York, 286 N. Y. 503 (1941), aff'g. 260 A. D.
912, 23 N. Y. S. 2d 841; certiorari den. 315 U. S.
818; reargurnent den. 294 N. Y. 839 (1945)
18,30
Ex parte Bakelite Corp., 279 U. S. 438 (1929)
13
Bank Line v. United States, 163 Fed. 2d 133 (C. C. A
2d, 1947)
23
Barr v. United States, 324 U. S. 83 (1945)
4, 5, 10, 17, 25,26,31
Barr v. United States, 161 Fed. 2d 362 (C. C. P. A.,
1947)
26
Beatson v. Skene, 5 H. & N. 838, 157 Repr. 1415
(Exch. 1860)
22,23
H. M. S. Bellerophon, 31 L. T. 756 (Adm. 1874)
22
Buttfield v. Stranahan,192 U. S. 470 (1904)
17
City of Hoboken v. State Board of Tax Appeals,
117 N. J. L. 119, 187 Atl. 164 (Ct. of E.& A., 1936)
Clyde v. Rogers, 87 N. Y. 625 (1881)
Cramer v. Arthur, 102 U. S. 612 (1880)
Crosby v. Pacific S. S. Lines, 133 Fed. 2d 470
(C. C. A. 9th, 1943)
In re Donald, 87 N. J. L. 691, 94 Atl. 580 (Ct. of
1915)
Duncan v. Cammell, Laird & Co. [1942], App. Cas.
624 (H. of L., 1942)

7
7
14
23
7
23

Earnshaw v. United States, 146 U. S. 60 (1892)
E. C. Miller Cedar Lumber Co. v. United States,
86 Fed. 2d 429 (C. C. P. A., 1936)

9,13

Federal Land Bank v. Bismarck Lumber Co., 314
U. S. 95 (1941)

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PAGE

Firth Sterling Steel Co. v. Bethlehem Steel Co., 199
Fed. 353 (D. C., Pa., 1912)

In re Grove, 180 Fed. 62 (C. C. A. 3rd, 1910)

Hadden v. Merritt, 115 U. S. 25 (1885)
International C. M. T. Co. v. Wm. Cramp & Sons
S. E. B. Co., 176 Fed. 925 (C. C., Pa., 1910)

15,26
21

J. K. Clarke v. United States, T. D. 43866, 17
C. C. P. A. (Cust.) 420 (1930)
J. S. Staedtler, Inc. v. United States, T. D. 49255,
25 C. C. P. A.(Cust.) 136 (1937)

Klingerit, Inc. v. United States, T. D. 5347, 9 Cust.
Ct. 648 (1942)

Lewis v. Roux Trucking Corp., 222 A. D. 204, 226
N. Y. S. 70 (N. Y. 2d Dept., 1927)

Mamary Bros. Inc. v. United States, C. D. 1142,
T. D. Vol. 83, No. 52, p. 23 (Dec. 8, 1948)
26
Marbury v. Madison, 1 Cr. (5 U. S.) 137 (1803)
19,31
McGlothan v. Pennsylvania R. R. Co., 170 Fed. 2d
121 (U. S. Ct. of App. 3rd, 1948)
24
Palmuth v. United States, 107 Fed. 2d 975 (C. C. A.
9th, 1939); affd. 309 U. S. 323
Passavant v. United States, 148 U. S. 214 (1893)
Pittman v. Home Owners' Loan Corp., 308 U. S. 21
(1939)
Pollen v. Ford Instrument Co., 26 Fed. Supp. 583
(D. C., N. Y., 1939)
St. Joseph Stock Yards Co. v. United States, 298
U. S. 38 (1936)
Thomas French & Sons v. International Braid Co.,
146 Fed. 2d 735 (C. C. A. 1st, 1945)
Tucker v. Peiler, 297 Fed. 570 (C. C. A. 2d, 1924);
certiorari den. 265 U. S. 587

8
9
19
21
9
7
8

United States v. J. Allston Newhall & Co., 91 Fed.
525 (C. C., Mass., 1899); app. dism. 92 Fed. 1023
10,12

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iv
PAGE
United States v. Klingenberg, 153 U. S. 93 (1894)
11,12
United States v. Knauth, 77 Fed. 599 (C. C., N. Y.,
1896)
12
United States v. Loeb & Schoenfeld, Inc., T. D.
36961, 7 Ct. Cust. App. 380 (1917)
8
United States v. Lucius Beebe & Sons, 122 Fed. 762
(C. C. A. 1st, 1903)
12
United States v. Whitridge, 197 U. S. 135 (1905)
10,12
Webster Coal Co. v. Cassatt, 207 U. S. 181 (1907)
Zimmerman v. Poindexter, 74 Fed. Supp. 933 (D. C.,
Hawaii, 1947)

8
24

TABLE OF STATUTES AND REGULATIONS.
Tariff Acts:
Act of Mar. 2, 1799, c. XXII, sec. 61; 1 Stat. 627,
673
Act of Aug. 5, 1909 (Payne-Aldrich Tariff Act),
c. 6, sec. 28; 36 Stat. 11,105

9,13

Judicial Code, secs. 188 et seq. (28 U. S. C.
301 et seq.)
Judicial Code, sec. 195 (28 U. S. C. 308)

13
9

Act of May 27, 1921 (Emergency Tariff Act of
1921), c. 14, sec. 403; 42 Stat. 17
Act of June 17, 1930 (Tariff Act of 1930), c. 497;
46 Stat. 734, 739:
sec. 514 (19 U. S. C. 1514)
sec. 515 (19 U. S. C. 1515)
sec. 516 (19 U. S. C. 1516)
sec. 522(31 U. S. C. 372)

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1
1
12
2, 3, 4, 13, 14,17, 18,
19, 25, 27,31

PAGE
Other Acts:
Act of June 10, 1890 (Customs Administrative
Act), c. 407; 26 Stat. 131:
sec. 13
sec. 14
sec. 15

11
11
9,11,12

Act of Dec. 23, 1913 (Federal Reserve Act), c. 6;
38 Stat. 251
sec. 10 (12 U. S. C. 241)
sec. 15 (12 U. S. C. 391)
sec. 16 (12 U. S. C. 411)

13
14
14
14

Act of June 25, 1948 (Judicial Code), c. 646;
62 Stat. 992:
sec. 1541 (28 U. S. C. 1541)
sec. 1583 (28 U. S. C. 1583)
secs. 2601-2 (28 U. S. C. 2601-2)

8,9,12
8,9
8

Treasury Department Regulations:
T. D. No. 47910 (Oct. 12, 1935)
68 T. D. 344-345

3, 25
3

TABLE OF OPINIONS AND TEXTS.
T. D. No. 32925, G. A. No. 7401 (Nov. 4, 1912)
15 Op. Atty. Gen. 378 (1877)
15 Op. Atty. Gen. 415 (1877)
25 Op. Atty. Gen. 326 (1905)
40 Op. Atty. Gen. No. 8, April 30, 1941
R. Elbertson Smith, "Customs Valuations in the
United States", pp. 24, 26, 273 (1948)

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21
20
20
20
21
11

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liniteb &tato Court of Cufitonus anb atent Zipper&
ARMAND SCHMOLL, INC.,
Appellant,
Customs Appeal
No. 4600.

V.
THE UNITED STATES,
Appellee.

BRIEF OF FEDERAL RESERVE BANK OF
NEW YORK, AMICUS CURIAE.
Opinion Below.
The Federal Reserve Bank of New York is not a party
to this proceeding (R. 47, 89; Appellant's Brief, p. 20). It
was instituted by appellant under sections 514 and 515 of
the Tariff Act of 1930 (c. 497; 46 Stat. 734; 19 U. S. C. 1514,
1515) upon appellant's protest against the action of the
Collector at the port of New York in liquidating an entry
of bides exported from Brazil. The entry was made on
October 22,1935 (R.8). In the proceeding below a subpoena
duces tecum was served on April 11, 1946, upon Federal
Reserve Bank of New York pursuant to an order of the
United States Customs Court (R. 17-18, 29). The subpoena
(R. 16) was for the production of:
"1. All of your records, correspondence, communications, and reports specifically involving the
buying rate in the New York market for cable
transfers payable in Brazilian milreis on October 1,
2, 3, 4, 5, and 7, 1935, and,
"2. Particularly the correspondence addressed
by the Commissioner of Customs, Treasury Department to the Federal Reserve Bank dated February
15, 1946, relating to the furnishing by the Bank to
the Collector of Customs or the Customs Information

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Exchange of the buying rate for cable transfers payable in Brazilian milreis together with the original
or copies of all correspondence passing between the
Federal Reserve Bank and the Treasury Department or any of its bureaus relating to the certification by the Bank of the buying rates for cable
transfers payable in Brazilian milreis between
April, 1933 and August, 1936."
The Federal Reserve Bank of New York moved to
quash the subpoena (R. 10), and the Customs Court
granted the motion by order dated April 22, 1946 (R. 22).
After trial, the Court entered judgment for the United
States affirming the decision of the Collector (R. 192). The
opinion of the Court is reported in C. D. 1097, T. D., April
8, 1948, Vol. 83, No. 15, p. 19 (R. 182-191).
Almost the entire argument in appellant's brief on this
appeal is directed at the action of the Customs Court in
quashing the subpoena. In view of the interest of the
Federal Reserve Bank of New York in that action, and the
importance of the issues to the Government of the United
States, this brief is filed by the Federal Reserve Bank of
New York as amicus curiae pursuant to permission of this
Court granted on May 23, 1949.

Statement.
The hides were exported from Brazil on October 7, 1935.
They were invoiced in Brazilian milreis (R. 7). On the
date of exportation, the Federal Reserve Bank of New
York, pursuant to section 522 of the Tariff Act of 1930 (46
Stat. 739; 31 U. S. C. 372), certified to the Secretary of the
Treasury the rate of $.083740 for the Brazilian milreis.
The certificate (Apl. Exh. 1, R. 38a) stated: "we have
ascertained and hereby certify to you that the buying rates
in the New York Market at noon today for cable transfers
payable in the foreign currencies are as shown below".
Then followed 41 rates for the currencies of foreign countries including the rate for the Brazilian milreis which, to-

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gether with 9 other rates, was accompanied by the remark:
"Nominal rate. Firm rates not available".
The Secretary of the Treasury published the rate for
milreis so certified (T. D. 47910, Oct. 12, 1935) and directed
that it be used by the Collectors (68 T. D. 344-345). The
Collector of Customs at New York determined the dutiable
value of the imported merchandise by converting the currency of the invoice at such rate, and computed the ad
valorem duty, and liquidated the entry, accordingly. Appellant protested the Collector's action claiming that an
erroneous rate had been used by him in the conversion of
the currency of the invoice.
Section 522(c) of the Tariff Act of 1930 provides that
the Federal Reserve Bank of New York shall determine
the buying rates in the New York market for cable transfers
payable in foreign currencies and "may in its discretion
... if there is no market buying rate for such cable transfers, calculate such rate". A cable transfer may be defined as an order transmitted by cable to pay a certain sum
of money to a designated payee. The section further
provides that the Federal Reserve Bank of New York shall
certify such rates daily to the Secretary of the Treasury to
be used "to convert foreign currency into currency of the
United States", "for the purpose of the assessment and
collection of duties upon merchandise imported into the
United States".
The section provides that the conversion of the foreign
currency shall be made at the rate certified for the date of
exportation of the merchandise. As the market rate for
foreign exchange may fluctuate from hour to hour (R. 144),
or minute to minute, the section requires the certification
of a market buying rate at noon. Consequently, the rate so
determined and certified by the Federal Reserve Bank of
New York for the currency of a foreign country is the price
at which cable transfers payable in the currency of such
foreign country are bought, or bid for, in substantial
amounts by dealers in foreign exchange exactly at noon
(R.106) in the foreign exchange market in New York. Since
at that time there may be several simultaneous purchases

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and bids, by the various dealers and traders in the New
York market, all at different prices, the determination from
them of the market price requires the exercise of expert
knowledge, skill and judgment, and section 522(c) expressly
provides that in its ascertainment the Federal Reserve
Bank of New York "may in its discretion (1) take into
consideration the last ascertainable transactions and quotations, whether direct or through exchange of other currencies,...". Such a market price may differ somewhat from
the price in any of the individual transactions. If, in the
words of the statute, "there is no market buying rate"
exactly at noon for cable transfers payable in a particular
currency, then the rate certified for such currency is a rate
which the Federal Reserve Bank of New York calculates, in
the exercise of its judgment and discretion, in accordance
with the terms and intent of section 522(c),as the rate which
would have been the market buying rate had there been
transactions or firm bids at that time in an active, free and
open market with adequate supply and demand.
In the present proceeding, the appellant sought to have
the United States Customs Court find independently a new
and different rate of exchange for the Brazilian milreis
for use by the Collector in reliquidating the entry of hides
(R. 2, pars. 6, 34), in lieu of the rate certified by the Federal
Reserve Bank of New York to the Secretary of the Treasury
and proclaimed by the latter (R. 152). Appellant's prayer
on the present appeal is that this Court instruct the Customs
Court so to find a different rate (Apl. Br., p. 28 R. 2,
par. 3).
The Customs Court, after consideration of the decision
and opinion of the United States Supreme Court in the case
of Barr v. United States, 324 U. S. 83 (1945), quoted that
opinion at length and held (R. 187-8):
"The substance of plaintiff's contention, as urged
in its brief, is that the Federal Reserve Bank failed
to certify the proper rate of conversion under the
statute. Plaintiff contends that the collector has
failed in his duty in that he has adopted a rate which
is not 'the buying rate for cable transfers'. This

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contention fails to take into account the discretion
granted to the Federal Reserve Bank by the terms of
the statute, i. e., that it may:
"(1) take into consideration the last ascertainable transactions and quotations, whether direct or
through exchange of other currencies, and (2) if
there is no market buying rate for such cable transfers, calculate such rate from actual transactions
and quotations in demand or time bills of exchange.
It is plain to the court that in denomi"*
nating the rate certified as 'nominal' said Federal
Reserve Bank indicated that such rate has been determined by calculation under the circumstances surrounding Brazilian currency transactions on the day
of exportation of this merchandise. We know of no
authority nor have we been furnished with citations
holding that the judicial review of the collector's
decisions provided in section 514 has been extended
to include a review of the accuracy of the process by
which the Federal Reserve Bank determines a buying
rate. Section 522(c) gives the Federal Reserve Bank
authority to determine a rate of exchange. This
function is one that involves the use of executive skill
and discretion. In the absence of an express statute
permitting judicial review, the determination of the
bank is final. This was indicated in the case of Barr
v. United States, 324 U. S. 83, where the Supreme
Court made the following statement:
The determination of the rate is left
"*
'
exclusively to the Federal Reserve Bank of New
York. It alone is given discretion in computing it."
The court referred (R. 189-90) to the case in this Court
of Amalgamated Textiles,Ltd. v. United States, T. D. 48378,
24 C. C. P. A. (Customs) 74, 84 Fed. 2d 210 (1936), and
further held (R. 190-1):
"In the instant case we have the certification of
the Federal Reserve Bank (Plaintiff's Exhibit 1)
which expressly states that it is certifying to 'buying
rates'.
"After examining the record, briefs, statutes,
and pertinent authorities upon the subject, we are
satisfied that the Federal Reserve Bank of New York

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in the proper exercise of its knowledge, judgment,
and discretion, and within the spirit and meaning
of section 522 (c), supra, determined a buying rate
for the Brazilian milreis on October 7, 1935, which
was duly certified by it to the Secretary of the
Treasury. That rate was made public by the Secretary to such extent as he deemed necessary and was
the rate employed by the collector of customs in the
process of liquidating the entry herein. At this
point judicial inquiry terminates.
"As was so aptly stated by the Supreme Court
of the United States in Barr v. United States, supra,
in discussing the extent of judicial review in a kindred case:
'
"*
The exercise of the Bank's discretionary power under 522 (c) is in the category
of administrative or executive action which this
Court held non-reviewable in Cramer v. Arthur,
supra, and in Hadden v. Merritt, 115 U. S. 25,
27-28. And see United States v. Bush & Co., 310
U. S. 371, 380.
"Accordingly, the claim of the plaintiff that 'an
erroneous and an improper' buying rate was used
by the collector of customs in liquidating the entry
herein is overruled and the decision of the collector
is affirmed."

Questions Presented.
(1) Should this Court exercise appellate jurisdiction to
review the action of the United States Customs Court in
quashing its own subpoena duces tecum served upon the
Federal Reserve Bank of New York?
(2) May the United States Customs Court review the
rate for Brazilian milreis, which has been certified by the
Federal Reserve Bank of New York to the Secretary of
the Treasury and published by him, and, under instruction
to it from this Court, lawfully find a new and different rate
of foreign exchange (in lieu of the rate so certified) for
use by the Collector in converting the milreis value of the
imported merchandise into currency of the United States?

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(3) Has the United States Customs Court lawful authority to compel the Federal Reserve Bank of New York to
produce its confidential records, and the confidential correspondence of the Secretary of the Treasury and others
with it, as demanded in the subpoena duces tecum?

POINT I.
Appellate jurisdiction should not be exercised by
this Court to review the quashing by the Customs
Court of its subpoena duces tecum.
(1) It is submitted that this Court does not have jurisdiction to review the action of the Customs Court
in quashing its subpoena issued upon its Order
since that action involved only the Customs Court's
own process and procedure.
Unless authorized by statute, an appellate court does
not have jurisdiction to review the action of a lower court
in quashing its subpoena.
Earnshaw v. United States, 146 U. S. 60 (1892)
Clyde v. Rogers, 87 N. Y. 625 (1881)
See In re Donald, 87 N. J. L. 691, 94 Atl. 580
(N. J. Ct. of E. & A., 1915)
City of Hoboken v. State Board of Tax Appeals,
117 N. .T. L. 119, 187 Atl. 164 (N. J. Ct. of
E. & A., 1936).
As the court said in Clyde v. Rogers, supra:
"Whether the subpoena duces tecum should be set
aside was matter of discretion in the court below.
These are
' mere matters of practice with which
we have no jurisdiction to interfere."
The quashing by a court of its subpoena does not involve an "appealable question".

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Thomas French cf Sons v. International Braid
Co., 146 Fed. 2d 735 (C. C. A. 1st, 1945);

8
Palmuth v. United States, 107 Fed. 2d 975 (C.
C. A. 9th, 1939); affd. 309 U. S. 323;
Tucker v. Peiler,297 Fed. 570 (C. C. A. 2d, 1924);
cert. den. 265 U. S. 587;
See Webster Coal Co. v. Cassatt, 207 U. S. 181
(1907).
Section 1541 of the new Judicial Code effective September 1, 1948 (Act of June 25, 1948, c. 646, 154;§
62 Stat.
992; 28 U. S. C. 1541), so far as material to this issue, limits
the jurisdiction of this Court to the review of "appealable
questions" and to the review of only such appealable questions as are "appealable questions as to the jurisdiction of
the Customs Court and as to the laws and regulations governing the collection of the customs revenues".
See United States v. Loeb & Schoenfeld, Inc.,
T. D. 36961, 7 Ct. Cust. App. 380, 384-5 (1917).
It is submitted that this shows a Congressional intention
that this Court shall not review a non-appealable question
even when it arises in a proceeding resulting in an appealable final decision. This seems particularly clear when one
contrasts the express inclusion in the enumeration of the
powers of the Customs Court of jurisdiction to review
decisions of collectors "including all orders and findings
entering into the same" (28 U. S. C. 1583).
(2) It is submitted that this Court does not have jurisdiction to review the quashing of a subpoena of
the Customs Court the subject matter of which
pertained solely to an amount of duty and to a
dutiable value stated in United States currency.

In section 1541 of the new Judicial Code, Congress has
specifically limited the appellate jurisdiction of this Court
as follows (procedure being set forth in sections 2601-2):
"§1541. Customs Court decisions.
"The Court of Customs and Patent Appeals
shall have jurisdiction to review by appeal final de-

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cisions of the Customs Court in all cases as to the
construction of the law and the facts respecting the
classification of merchandise, the rate of duty imposed thereon under such classifications, and the fees
and charges connected therewith, and all appealable
questions as to the jurisdiction of the Customs Court
and as to the laws and regulations governing the collection of the customs revenues."
Appellate jurisdiction as to the amount of duties, which
is conferred by section 1583 upon the Customs Court, is not
included in the appellate jurisdiction of this Court. Therefore the amount of duty may not be reviewed by this Court
unless a rate of duty or classification (appellate jurisdiction over which is expressly conferred upon this Court) is
dependent thereon.
See E. C. Miller Cedar Lumber Co. v. United
States, 86 Fed. 2d 429, 434-6 (C. C. P. A.,
1936).
Similarly, the right to review the dutiable value of imported merchandise, as distinguished from classifications
thereof and rates of duty thereon, has not been conferred
upon this Court.
Passavant v. United States, 148 U. S. 214 (1892);
See St. Joseph Stock Yards Co. v. United States,
298 U. S. 38, 79 (1936).
The Passavant case involved interpretation of section
15 of the Customs Administrative Act (Act of June 10, 1890,
c. 407, Sec. 15; 26 Stat. 137), but no change in the terms of
that section, enlarging the jurisdiction of the appellate court
over dutiable values, has been made by any of the succeeding
statutes (Payne-Aldrich Tariff Act of Aug. 5, 1909, c. 6,
sec. 28; 36 Stat. 105; sec. 195 of the former Judicial Code
and its amendments; 36 Stat. 1145; 38 Stat. 703; 39 Stat.
727; 43 Stat. 940; 28 U. S. C. 308; section 1541 of the new
Judicial Code).
Under the new Judicial Code, therefore, this Court does
not have appellate jurisdiction to review the amount of

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duty involved in the case on this appeal, since neither classification of the imported merchandise, nor rate of duty
thereon, is dependent upon the amount of duty. It necessarily follows that this Court does not have jurisdiction of
any of the elements entering into the ascertainment of the
amount of duty, other than classification and rate the jurisdiction to review which is given this Court. In the instant
case the rate of foreign exchange in no way affected the
classification of the hides or rate of duty thereon, but was
used solely to convert the dutiable value of the hides, stated
in foreign currency, into a dutiable value, stated in dollars,
from which the amount of duty was computed. The rate so
used is an element in the computation of the amount of duty.
United States v. J. Allston Newhall & Co., 91
Fed. 525, 532 (C. C., Mass., 1899); app. dis.
92 Fed. 1023; overruled on other points by
United States v. Whitridge, 197 U. S. 135
(1905).
It follows that this Court, having no jurisdiction over
amount of duty, lacks jurisdiction to review the decision
of the Customs Court as to the rate of foreign exchange
used in computing the amount of duty.
This Congressional intent would seem to find confirmation in the statutory treatment of dutiable value. The
courts have recognized, under the various statutes conferring jurisdiction on this Court and its predecessors, that
this Court has, as its predecessors had, no jurisdiction to
review the dutiable value of merchandise. It would seem
to be a necessary corollary that this Court may no more
review the dutiable value when stated in dollars than when
stated in foreign currency. The Supreme Court in the
Barr case stated (p. 89) that the use of the "rate for the
foreign exchange with which the imported goods are purchased ... reflects values in United States currency which
... serve as the measure of the valuation of the goods for
purposes of the ad valorem tax", and (p. 91) that this
dollar value is the actual valuation before the Collector.

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"Dutiable value" is the value of an article for the assessment of customs duties which are based upon, or regulated
by, value. It is a broader concept than appraisement, and
the rate of conversion is a component in its determination.
R. Elbertson Smith: "Customs Valuation in the
United States", pp. 24, 26, The University of
Chicago Press (1948) (and see p. 273, to the
effect that the rate is also a factor in the
amount of duty).
It would follow that this Court has no jurisdiction of the
factor used in converting value stated in foreign currency in order to determine the dutiable value stated in
dollars.
In United States v. Klingenberg, 153 U. S. 93 (1894) the
determination by the Treasury of the value of the Austrian
florin, and the collector's action in applying it, were held
to be conclusive and not subject to review. The court,
however, in what it clearly stated as dictum, based upon a
supposititious premise to the contrary (ibid., p. 101), expressed the view that the rate used in converting a value
of merchandise from foreign currency into the dollar value
upon which the ad valorem customs duty was assessed was
not an element in determining dutiable value—as to which
the Circuit Court had no jurisdiction; and that such rate
was an element in determining the amount of duty—as to
which the Circuit Court had jurisdiction. It based jurisdiction as to the amount of duty upon the theory that,
except as to dutiable value, the Circuit Court had exactly
the same appellate jurisdiction, under section 15 of the
Customs Administrative Act of 1890 (26 Stat. 131), as the
appellate jurisdiction of the board of general appraisers.
This theory would seem to have been inconsistent with
the terms of the 1890 Act. Section 13 thereof provided that
the decision as to dutiable value of the board of general
appraisers, following appraisement, was final and conclusive. Section 14 provided for appeals to the board
(from decisions of the Collector) as to rates and amounts

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of duty. Section 15 provided the rights of appellants before the Circuit Courts respecting appeals from decisions
of the board as to the classification of merchandise and the
rate of duty imposed thereon under the classification (but
not appeals from decisions of the board as to the amount
of duty). These sections would seem to have made a decision of the board as to an amount of duty, following the
liquidation of an entry, final and conclusive, just as a
decision of the board as to dutiable value, following an
appraisement, was final and conclusive. The Circuit Court
of Appeals for the First Circuit has stated with respect to
the opinion in the Klingenberg case (United States v.
Lucius Beebe & Sons, 122 Fed. 762, 770 (C. C. A. 1st,
1903)):
"Several things said in it may be disregarded as
dicta ;..."
The dictum in the Klingenberg case was accepted in
some of the older cases such as United States v. Knauth,
77 Fed. 599 (C. C., N. Y., 1896) and United States v.
J. Allston Newhall & Co., supra. But the opinions in these
two cases, upon the principal issues involved therein, were
completely overruled by a unanimous Supreme Court in
United States v. Whitridge, supra.
See J. K. Clarke v. United States, T. D. 43866,
17 C. C. P. A. (Cust.) 420, 423-4 (1930).
Whatever may have been the proper interpretation of
the statutes preceding the new Judicial Code, it is submitted that under the present law it is clear that this Court
has no jurisdiction over the amount of duty. The new
Judicial Code, by its direct definition of appellate jurisdiction of this Court, in place of an indirect limitation by prescribing rights of appellants (as is still the case with the
rights of appeal of American manufacturers, 19 U. S. C.
1516, not repealed by new Judicial Code, sec. 39), shows
the intent of Congress to limit the jurisdiction of this Court
to the precise terms of Section 1541. Moreover, this Court,

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unlike its predecessor appellate courts, the Circuit Courts,
which were constitutional courts of general jurisdiction, is
a legislative court having an appellate jurisdiction strictly
limited by Congress.
Ex parte Bakelite Corp., 279 U. S. 438 (1929).
By the express terms of the act creating this Court (as the
Court of Customs Appeals) in 1909, its jurisdiction was
"established and limited" by Congress (Act of Aug.5,1909,
c. 6, sec. 28; former Judicial Code sections 188-199; 28
U. S. C. 301-311).
It is submitted, therefore, that this Court should follow
its own reasoning in E. C. Miller Cedar Lumber Co., supra,
and hold that it has no jursidiction to review the conversion
rate used in computing the amount of duty. As a result
of such holding, this Court must necessarily further hold
that it is without jurisdiction to review the action of the
Customs Court in quashing its subpoena duces tecum which
called for evidence as to a factor the use of which was confined to the determination of the dutiable value stated in
dollars, and of the amount of duty, over which this Court
has no appellate jurisdiction.

POINT II.
The rates of foreign exchange determined and
certified to the Secretary of the Treasury by the Federal Reserve Bank of New York, pursuant to Section
522(c) of the Tariff Act of 1930, are final and conclusive and not subject to judicial review.
The Federal Reserve Bank of New York was created
by Act of Congress (Federal Reserve Act of December 23,
1913, ch. 6; 38 Stat. 251). It is not a New York corporation
as the appellant's brief would seem to suggest (Apl. Br.,
p. 2; see R. 27, 177). It acts under the supervision and
regulations of the Board of Governors of the Federal
Reserve System which is composed exclusively of officers

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of the United States (Fed. Res. Act, sec. 10; 12 U. S. C.
241), and performs numerous functions of the United
States Government. For example, it issues currency
of the United States, including Federal Reserve Notes
which are obligations both of the bank and of the
United States (Fed. Res. Act, sec. 16; 12 U. S. C. 411), and
acts as depositary and fiscal agent of the United States
(Fed. Res. Act, sec. 15; 12 U. S. C. 391). The function
of determining and certifying rates of foreign exchange
for use in the assessment and collection of customs duties
is another instance where the Federal Reserve Bank of
New York is acting in performance of a governmental duty
in aid of the administration by the United States Government of one of its primary executive functions, namely, the
collection of customs duties.
Prior to the enactment of the provisions of section 522(c)
in the Emergency Tariff Act of 1921 (Act of May 27, 1921,
c. 14, sec. 403; 42 Stat. 17), and under earlier statutes
beginning with the Act of March 2, 1799 (c. XXII, sec. 61;
1 Stat. 673), United States consuls determined and certified
the rates for conversion of depreciated foreign currencies,
pursuant to regulation made by the President through the
Secretary of the Treasury. The procedure under this regulation was superseded by the Tariff Act of 1921 which
substituted the Federal Reserve Bank of New York to determine, and certify to the Secretary of the Treasury, the
foreign exchange rates for currencies for use in the collection and assessment of customs duties. The Federal Reserve
Bank of New York thereby became by statute the immediate successor to the United States consuls in determining
and certifying the rates for conversion of foreign currencies.
The determination and certification of such rates of
foreign exchange is the performance of an administrative
or executive function of the Government of the United
States requiring skill and the exercise of judgment and
discretion. The rates so certified are not subject to judicial
review.

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Cramer v. Arthur, 102 U. S. 612 (1880).

15
In this leading case the Collector used a value certified
by the consul and, as the court stated, "The plaintiff seeks
to go behind this valuation". The court held (at p. 619):

"This we think the plaintiff cannot be allowed to
do. The proclamation of the Secretary and the certificate of the consul must be regarded as conclusive.
In the estimation of the value of foreign moneys for
the purpose of assessing duties, there must be an end
to controversy somewhere. When Congress fixes the
value by a general statute, parties must abide by
that. When it fixes the value through the agency of
official instrumentalities, devised for the purpose of
making a nearer approximation to the actual state
of things, they must abide by the values so ascertained. If the currency is a standard one, based on
coin, the Secretary's proclamation fixes it; if it is a
depreciated currency, the parties may have the benefit of a consular certificate. To go behind these and
allow an examination by affidavits in every case would
put the assessment of duties at sea. It would create
utter confusion and uncertainty. If existing regulations are found to be insufficient, if they lead to
inaccurate results, the only remedy is to apply to the
President, through the Treasury Department, to
change the regulations."
Inasmuch as rates of foreign exchange and values of
foreign coins so determined and certified are conclusive
upon customs-house officers and importers as well as others,
no evidence of errors alleged to exist in them can be shown
in a judicial proceeding to affect the rights of the Government or individuals.
Hadden v. Merritt, 115 TJ. S. 25 (1885).
The court held (at pp. 27-28):
"The value of foreign coins, as ascertained by the
estimate of the director of the mint and proclaimed
by the Secretary of the Treasury, is conclusive upon
custom-house officers and importers. No errors
alleged to exist in the estimate, resulting from any
cause, can be shown in a judicial proceeding, to affect
the rights of the government or individuals. There

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is no value, and can be none, in such coins, except as
thus ascertained; and the duty of ascertaining and
declaring their value, cast upon the Treasury Department, is the performance of an executive function,
requiring skill and the exercise of judgment and discretion, which precludes judicial inquiry into the correctness of the decision. If any error, in adopting a
wrong standard, rule, or mode of computation, or in
any other way, is alleged to have been committed,
there is but one method of correction. That is to
appeal to the department itself. To permit judicial
inquiry in any case is to open a matter for repeated
decision, which the statute evidently intended should
be annually settled by public authority; and there is
not, as is assumed in the argument of the plaintiff in
error, any such positive and peremptory rule of valuation prescribed in the statute, as serves to limit the
discretion of the Treasury Department in making its
published estimate, or would enable a court to correct
an alleged mistake or miscalculation. The whole subject is confided by the law exclusively to the jurisdiction of the executive officers charged with the duty;
and their action cannot be otherwise questioned.
"Such was the principle announced in the case of
Cramer v. Arthur, 102 U. S. 612. It was there said,
'That valuation, so long as it remained unchanged,
was binding on the collector and on importers—just
as binding as if it had been in a permanent statute,
like the statute of 1846, for example. Parties cannot
be permitted to go behind the proclamation, any more
than they would have been permitted to go behind the
statute, for the purpose of proving, by parol or by
financial quotations in gazettes, that its valuations
are inaccurate. The government gets at the truth as
near as it can, and proclaims it. Importers and collectors must abide by the rule as proclaimed. It
would be a constant source of confusion and uncertainty if every importer could on every invoice, raise
the question of the value of foreign moneys and coins,'
pages 616, 617. . . ."
Later cases are to the same effect.

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Amalgamated Textiles, Ltd. v. United States,
T. D. 47931, Oct. 10, 1935, affd. 84 Fed. 2d 210
(Oust. & Pat. App. 1936)

17
J. S. Staedtler,Inc. v. United States, T. D. 49255,
25 C. C. P. A. (Oust.) 136 (1937)
See Buttfield v. Stranahan, 192 U. S. 470 (1904)
as to other provisions of the tariff laws.
The Supreme Court of the United States has held that
the rates of foreign exchange determined and certified by
the Federal Reserve Bank of New York, pursuant to section
522(c) of the Tariff Act of 1930, fall within the rule of these
cases.
Barr v. United States of America, 324 U. S. 83
(1945).
Thus the rule of law so established by the Supreme Court
of the United States has been sustained by an uninterrupted
line of decisions in that Court and this Court during the
course of the past three-quarters of a century. The only
argument offered by appellant against the rule is mere
vituperation (Apl. Br., pp. 8, 19, 22, 24).

POINT III.
The United States Customs Court (a) properly declined to compel the Federal Reserve Bank of New
York to disclose its files and records and other information taken into consideration by it in determining
the rates of foreign exchange certified by it to the
Secretary of the Treasury pursuant to Section 522(c)
of the Tariff Act of 1930, and (b) properly affirmed
the decision of the Collector.
(1) The evidence demanded is irrelevant and immaterial.

The only possible relevancy that the files and correspondence sought to be produced by the subpoena might have, if
any,is to show some error in the rate certified by the Federal
Reserve Bank of New York to the Secretary of the
Treasury. Since, as set forth in POINT II of this brief, the
rate certified by the bank is final and conclusive, no error

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in such rate may be shown and the evidence sought is
irrelevant and immaterial.
It follows that the Federal Reserve Bank of New York
may not be required to produce in any court, or testify with
respect to, its files, correspondence and other information
which it took into consideration in determining and certifying rates of foreign exchange pursuant to Section 522(c)
of the Tariff Act of 1930.
(2) The evidence demanded is confidential and immune from subpoena.
Another rule of law also conclusively required the
quashing by the Customs Court of its subpoena duces
tecum. The evidence sought to be produced by the subpoena consists of confidential files, records and correspondence of the United States of America and its agencies,
which are immune from subpoena.
The subpoena served upon the Federal Reserve Bank
of New York commands it to produce "the original or
copies of all correspondence passing between the Federal
Reserve Bank and the Treasury Department or any of its
bureaus relating to the certification by the Bank of the
buying rates for cable transfers payable in Brazilian
milreis between April, 1933 and August, 1936".
As set forth in POINT II of this brief, the Federal
Reserve Bank of New York, in determining and certifying
the buying rates for cable transfers payable in foreign currencies, acts as an administrative or executive agency of
the United States.
Armand Schmoll, Inc. v. Federal Reserve Bank
of New York, 286 N. Y. 503 (1941) cert. den.
315 U. S. 818 (1942) plaintiff's motion for
reargument denied 294 N. Y. 839 (1945).
In that case the New York Court of Appeals held, as to the
function of the Federal Reserve Bank of New York in
determining and certifying such rates (286 N. Y. at page
503)
:

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"The Federal Reserve Bank is a Federal agency
exercising powers conferred by Federal statute and
performing duties imposed upon it by Federal statute in a field which, under the Constitution of the
United States, is within the sole and exclusive jurisdiction of the Federal government."
It is also clear that when Congress confers upon a corporation the duty to perform a governmental function, the
same immunities attach to that function when performed
by the corporation as when performed by the government
itself through its departments.
Pittman v. Home Owners' Loan Corp., 308 U. S.
21, 32 (1939)
Federal Land Bank v. Bismarck Lumber Co.,
314 U. S. 95, 102 (1941).
Therefore, the immunity from subpoena of confidential
records of the Government, its agencies and instrumentalities, attaches to the function performed by the Federal
Reserve Bank of New York pursuant to section 522(c) of
the Tariff Act of 1930.
The rule regarding the privileged character of confidential information in the hands of the Government, its officers, departments and agencies, has been enforced in the
United States since the early days of the Republic. In
Marbury v. Madison, 1 Cr. (5 U. S.) 137 (1803), cited by
the appellant (Apl. Br., pp. 22, 24, 26), Mr. Lincoln, who
had been Secretary of State and was then Attorney General,
was subpoenaed into court and was asked whether certain
papers had been in his office when he was Secretary of State,
and what he had done with them. The following appears
at pages 144, 145 of the report of the case:
"The court said, that if Mr. Lincoln wished time
to consider what answers he should make, they
would give him time but they had no doubt he ought
to answer. There was nothing confidential required
to be disclosed. If there had been he was not obliged
to answer it; and if he thought that any thing was
communicated to him in confidence he was not bound

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20
to disclose it; nor was he obliged to state any thing
which would criminate himself; but that the fact
whether such commissions had been in the office or
not, could not be a confidential fact; it is a fact which
all the world have a right to know. If he thought
any of the questions improper, he might state his
objections * * *." (Emphasis supplied.)
In an opinion of Attorney General Devens, 15 Op. Atty.
Gen. 378 (1877), regarding a case in which a United States
Attorney had been subpoenaed to appear in a private suit
and bring correspondence with him, he stated the principles
as follows:
"Their exception from being made instruments
of evidence in a suit between private parties rests
upon the principle that where the production of an
official paper would be injurious to those interests,
the general public interest must be considered paramount to the individual interest of a suitor in a
court of justice."
See 15 Op. Atty. Gen. 415 (1877).
In 1905 Attorney General Moody gave an opinion regarding a subpoena served upon the Secretary of Commerce
(25 Op. Atty. Gen. 326, 331). He stated:
"* * * I am of the opinion that under the authorities cited above you may properly decline to
furnish official records of the Department, or copies
thereof, or to give testimony in a cause pending in
court, whenever in your judgment the production
of such papers or the giving of such testimony
might prove prejudicial for any reason to the Government or to the public interest. The records of
your Department are executive documents acquired
by the Government for the purpose of administering
its own affairs they are to a certain extent quasiconfidential in their nature, and must therefore be
classed as privileged communications whose production cannot be compelled by a court without the
express authority of a law of the United States."

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In an opinion dated April 30, 1941 (40 Op. Atty. Gen.
No. 8), on the same subject, Attorney General Jackson
stated:
"This discretion in the executive branch has
been upheld and respected by the judiciary. The
courts have repeatedly held that they will not and
cannot require the executive to produce such papers
when in the opinion of the executive their production is contrary to the public interests. The courts
have held also that the question whether the production of the papers would be against the public
interest is one for the executive and not for the
courts to determine. Marbury v. Madison, 1 Cranch
137, 169; Totten v. United States, 92 U. S. 105;
Kilbourn v. Thompson, 103 U. S. 168, 190; Vogel v.
Gruaz, 110 U. S. 311; In re Quarles and Butler, 158
U. S. 532; Boske v. Comm gore, 177 U. S. 459; In re
Huttnian, 70 Fed. 699; In re Lambertson, 124 Fed.
446; In re Valecia Condensed Milk Co., 240 Fed.
310; Elrod v. Moss, 278 Fed. 123; Arnstein v. United
States, 296 Fed. 946; Gray v. Pentland, 2 Sergeant
& Rawle's (Pa.), 23, 28; Thompson v. German Valley
R. Co., 22 N. J. Equity 111; Worthington v. Scribner,
109 Mass. 487; Appeal of Hartranft, 85 Pa. 433, 445;
2 Burr Trials, 533-536; see also 25 Op. A. G. 326."
The doctrine has been reiterated by the Federal courts
in other cases.
International C. M. T. Co. v. Wm. Cramp & Sons
S.& E. B. Co., 176 Fed. 925 (C. C., Pa., 1910);
In re Grove, 180 Fed. 62 (C. C. A. 3rd, 1910);
Firth Sterling Steel Co. v. Bethlehem Steel Co.,
19 Fed. 353 (D. C., Pa., 1912);
Pollen v. Ford Instrument Co., 26 F. Supp. 583
(D. C., N. Y., 1939).
Perhaps the best statement of the basic rule has been
made by the Board of General Appraisers (T. D.32925-G. A.
7401, Nov. 4, 1912). A subpoena duces tecum was issued to
the Secretary of the Treasury, calling for the production,
in a reappraisement proceeding, of a report rendered by a

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22
confidential agent in Germany. The Assistant Secretary
wrote a letter stating that the report was confidential and
that it would be against public policy to produce it. In
holding that the subpoena should be discharged, the court
said:
"' court can not compel a member of the
the
President's Cabinet to do anything other than those
ministerial acts which the law expressly enjoins upon
him, and the probable reason that there are to be
found no cases deciding the exact question arising
in this case is that it is so clear upon reason and
principle that the determination of what is and what
is not a State secret, and whether a disclosure would
or would not be prejudicial to Government interest
and against public policy must of very necessity be
lodged in the executive officer who is the repository of that secret. To compel a Cabinet officer to
produce in court a letter or document which he asserts would be against public policy to disclose would
be to defeat the very secrecy which the officer in the
discharge of high public duties would have thrown
around the letter or document in question, and without having it produced in court it would be impossible for the court to determine whether or not it
"
was such a document
The rule has been recently enforced in Klingerit Inc. v.
United States, T. D. 5734, 9 Customs Ct. Rep. 648 (1942).
The rule has also been clearly stated by the courts in
England, which have long recognized the privileged character of confidential documents of the Government and
its agencies. The rule was enforced in Beatson v. Skene,
5 H.& N.838,852-4,157 Repr. 1415 (Exch.,1860), mentioned
in appellant's brief (p. 23), which is a leading case, followed
in H. M.S. Bellerophon, 31 L. T. 756 (1874).
Professor Wigmore ("Evidence", 3rd ed., 1940) recognizes that the doctrine of the Beatson case is the settled
law, although as an academic commentator he expresses
some disapproval of it in the quotation from him in appellant's brief (pp. 22-23). A New York court has referred
to his premises for such disapproval as "dogmatic assertion", "bald assumption without basis in fact", and as

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contrary to what the United States Supreme Court has
decided.
Lewis v. Roux Trucking Corp., 222 A. D. 204,
226 N. Y. S. 70 at pp. 76-78 (N. Y. App. Div.
2d Dept., 1927).
The doctrine of Beatson v. Skene was reaffirmed in 1942
by the House of Lords in Duncan v. Cammell,Laird & Company [1942] App. Cas. 624 (cited in Apl. Br., p. 26). In
holding that a ministerial objection was conclusive upon the
court, the Lord Chancellor stated (at page 642):
"The minister
' to take the responought not
sibility of withholding production except in cases
where the public interest would otherwise be damnified, for example, where disclosure would be injurious to national defense, or to good diplomatic relations, or where the practice of keeping a class of
documents secret is necessary for the proper functioning of the public service."
None of the cases cited by appellant (Apl. Br., pp. 2226) derogates from the rule. Appellant relies particuarly
(Apl. Br., pp. 24-26) on Bank Line v. United States, 163
Fed. 2d 133 (C. C. A. 2nd, 1947). It was held in that case
(p.139) that a mandatory writ should not be granted against
the issuance, by a lower court, of an order in the nature
of a subpoena duces tecum. The court made clear that upon
the return of any such order served on the Navy Department, the Secretary of the Navy had the right to decline
to testify as to official records of the Department. The
court quoted (p. 138) the opinion of Attorney General
Moody, supra, and cited (p. 139) Duncan v. Cammell, Laird
& Co., supra, as stating the law. The other cases cited on
the point by appellant, in addition to Duncan v. Cammell,
Laird & Co., supra, and Marbury v. Madison, supra, are
in accord. In Crosby v. Pacific S.S. Lines, 133 Fed. 2d
470 (C. C. A. 9th, 1943) the proper official did not claim
the privilege; the court held (p. 475):"* * * there is no
showing that Walsh was authorized to claim the privilege

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m". In McGlothan v. Pennsylvania R.R. Co., 170 Fed.
2d 121 (U. S. Ct. App. 3rd, 1948) a Federal statute provided for the disclosure of the information by the Veterans'
Administration. In Zimmerman v. Poindexter, 74 Fed.
Supp. 933 (D. C., Hawaii, 1947) the court stated (p. 934)
:
* the Secretary of the Army, the lawful custodian of
' the subpoena has issued, imposes
the files
for which
no objection to the production of the subpoenaed material", and held (p. 936) that the objection of the Department of Justice was not effective as to material voluntarily deposited by it in such files.
In the case on appeal to this Court the affidavit of the
Vice President of Federal Reserve Bank of New York
(R. 11-15) clearly demonstrates (R. 13-15) why it is prejudicial to the public interest to require the production
of the files and documents specified in the subpoena. By a
letter (R. 21) the Acting Secretary of the Treasury stated
that it had been determined that the records and correspondence, sought to be produced by the subpoena, which
had originated in the Treasury Department were confidential and that it would be inimical to the interests of the
United States Government for any thereof to be disclosed.
(3) The Collector's decision was properly affirmed.

Since, as set forth in Point II of this brief, the rate
certified by the Federal Reserve Bank of New York is final
and conclusive, the United States Customs Court properly
affirmed the action of the Collector in converting the currency of the invoice at such rate and computing the duty
and liquidating the entry accordingly.

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POINT IV.
The contentions of the appellant are not supported
by the evidence.
(1) The appellant's position is ambiguous and the
appellant confuses actual and nominal buying
rates.
The Record is unquestionably clear that a rate was
determined and certified, as a buying rate for cable transfers, by the Federal Reserve Bank of New York (Apl. Exh.
1, R. 38A), and that it was published by the Secretary of
the Treasury as such a rate (T. D. 47910, Oct. 13, 1935).
Appellant contends that in using that rate the Collector
wrongfully disregarded the buying rate for cable transfers (Apl. Br., pp. 1, 5; R. 3, pars. 23-24, 9, 26, 27, 28, 32, 47,
74).
The position of the appellant is thus in its essence an
ambiguous one. The ambiguity could readily have been
avoided if the appellant had taken the position that a buying rate had been certified, but that it was an incorrect
figure. The appellant, however, chooses to retain the
ambiguity (see particularly questions 1 and 2, Apl. Br., p.
5 and p. 27; R. 2, pars. 9-11). As a consequence, numerous
statements in appellant's brief need analysis in order that
they may hot be misleading.
Throughout appellant's brief there is, wittingly or
unwittingly, confusion between an "actual" buying rate
and a "nominal" or calculated buying rate (Apl. Br., pp.
1, 2, 4, 5, 8-10, 13, 14, 17, 18, 24, 27, 28; see R. 2, pars. 9-10,
41, 76, 128). This confusion is entirely artificial. The
price in an actual purchase of a cable transfer payable in
a foreign currency is an "actual" buying rate ("reflecting
actual market transactions", Apl. Br., p. 2). For purposes
of certification under Section 522(c), it would have to be
the price in a transaction in the New York market exactly
at noon. As made clear by the Supreme Court in the Barr
case, it also must be a market price representing or

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26
approximating the true value of the foreign currency in
respect of merchandise imported into the United States
(Apl. Br., p. 11) (see the second Barr case: Barr v. United
States (C. C. P. A., 1947) 161 Fed. 2d 362, 366), which in
turn requires it to be a price in a transaction in a free
market having an adequate supply and demand (and not
a price in an isolated transaction, see Mamary Bros., Inc.
v. United States, C. D. 1142, T. D. Vol. 83, No. 52, p. 23,
decided Dec. 8, 1948, nor a price for an insignificant
amount). A "nominal" rate on the other hand is one calculated, as expressly required by section 522(c) (Apl. Br.,
p. 18), in the absence in the New York market exactly at
noon of any such actual purchase, and of any firm bid offering to make such a purchase.
As the Supreme Court held in the Barr case (quoted in
part in appellant's brief, pp. 11-12, and in the opinion of
the Customs Court, supra), the performance of the duty
imposed upon the Federal Reserve Bank of New York by
section 522(c) requires skill and involves the exercise of
judgment and discretion, and is not a mere arithmetical
computation. (See Hadden v. Merritt, supra, at p. 27).
Counsel for appellant is thus wrong in his claim that the
performance of such duty is a mere ministerial duty involving only a "mathematical computation" (Apl. Br., pp. 21,
27; R. 3, par. 17). Congress delegated the function of
determining the rates to the Federal Reserve Bank of New
York realizing that it had the necessary technical knowledge, experience, and sources of information including its
member banks (R. 93,96, 104) and other dealers in foreign
exchange, to discharge the duty imposed by the statute.
As emphasized by the Supreme Court in the Barr case, the
difficulties inherent in the performance of that duty are
manifested in the history of the continuous efforts of our
Government, since its founding and until the selection of
the Federal Reserve Bank of New York in 1921, to discover
the best means of resolving them.

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(2) The certification of a "nominal" buying rate was
proper.
With the important distinction between "actual" and
"nominal" buying rates in mind, it is at once apparent
that there is no evidence whatsover in this case that shows
or even indicates that there was any actual buying rate,
for cable transfers payable in Brazilian milreis in the New
York market at noon on October 7, 1935. The trial court
did not, as intimated by appellant (Apl. Br., pp. 8, 15), exclude such evidence, but on the contrary was "inclined to
allow considerable leeway" in the introduction of evidence
(R. 141, 150). No evidence as to any transactions on October 7, 1935 was excluded, but there was no evidence introduced of any transactions in cable transfers on that date.
Appellant's first witness, Mr. Knoke, testified (R. 98, 101,
108, 109) only that he was not in a position to state from
his personal recollection (R. 113) that there were or were
not actual transactions by member banks in such cable
transfers on that date (R. 111-112, 119-120). The meaning
of his previous testimony (R. 108), quoted in appellant's
brief (p. 9, R. 107; see Apl. Br., pp. 13, 18) is that the
Federal Reserve Bank of New York did not certify an
actual buying rate (R. 108-109) for October 7, 1935 (R. 107)
because there were no actual transactions. He testified
that the Bank certified a rate as a buying rate in compliance
with Section 522(c) (R. 107-108) which was designated a
"nominal" rate (R. 107, 119) since it was not a rate in an
actual transaction in the New York market (R. 108-109),
but was the "rate calculated to be the buying rate in
the New York market for Brazilian milreis for October
7, 1935" (R. 108) taking into consideration "the last
ascertainable transactions and quotations for Brazilian
milreis, whether they were direct or through exchange
of other currencies" (R. 110) and other relevant factors
(R. 110). He further testified that when there were no
actual transactions, the bank so calculated the rate (R.109).
Counsel for appellant admitted that Mr. Knoke's testimony was to the effect that there were no actual transac-

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28
tions (R. 118, 136). Mr. Cameron, the officer who had signed
the certifications on behalf of the Federal Reserve Bank
of New York (R. 124), also called as appellant's witness
(R. 88, 122), testified to the effect that the bank certified
a buying rate in the New York market at noon October 7,
1935 for cable transfers payable in Brazilian milreis (R.
125-126; Apl. Exh. 1, R. 38A) in compliance with the statute (R. 132), which was a "nominal" rate (R. 129) because of the absence of an actual rate, the result of actual
transactions (R. 129, 130, 131; see 139). In view of these
circumstances,the Federal Reserve Bank of New York correctly certified a computed, or "nominal", buying rate as
required by section 522(c) (see R. 134).
Contrary, therefore, to appellant's repeated statements
to the effect that the Collector did not use "the buying
rate in the New York market at noon on the date of exportation of the hides" (Apl. Br., pp. 1, 2, 4, 5, 8, 27; R. 26),
the Collector did use such a rate, although it was necessarily a computed or nominal rate, not a rate involved in
an actual transaction at that exact time. It was a duly certified rate, not one merely "shown in a letter from the Federal Reserve Bank of New York to the Secretary of the
Treasury", as stated by appellant (Apl. Br., p. 1). It was
not a rate "arbitrarily fixed" as asserted by appellant
(Apl. Br., p. 2), for, although not a rate in an actual transaction in the New York market, appellant concedes that it
was a rate in actual transactions in Brazil (Apl. Br., p. 13).
The appellant's intemperate characterizations of the
action of the Federal Reserve Bank of New York as a
"deliberate, wilful violation of the statute", a refusal "to
perform its clear duty", an "official falsity", a "patent"
wrong, a "conceded" wrong (Apl. Br., pp. 8, 19, 21), are
completely without foundation.
(3) There is no evidence of any actual transaction
in cable transfers payable in Brazilian milreis.
The appellant's counsel asks (Apl. Br., p. 5): "How
more accurately could one find whether the Bank had acted
arbitrarily in not finding a buying rate at 110011 than to sub-

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29
poena the records of the Bank as to such buying rates?"
Disregarding the false implication that the bank did not
determine a buying rate at noon—the indisputable fact
being that it did so as set forth in its certification to the
Secretary of the Treasury—the answer to counsel's question is clear that a more accurate method would be to subpoena the records of the commercial banks and other
dealers in foreign exchange who customarily dealt in foreign exchange in the New York market. One of such banks
is the Guaranty Trust Company of New York (a member
bank having transactions in foreign exchange, Apl. Br., p.
10). Appellant's counsel asserts that many witnesses
available to him had the requisite knowledge. He states
that "every employee of every member bank reporting
transactions in Brazilian milreis, every business man purchasing in the market milreis for cable transfers, including newspapers, had knowledge of the facts sought to be
produced by the subpoena duces tecum in this case" (Apl.
Br., p. 24; R. 28). He further states that they were "public market transactions" (Apl. Br., p. 21) at'
"rates
*
known to everyone" (Apl. Br., p. 8 and see p. 5; R. 73).
Appellant's witness Mr. O'Brien is an officer of the
Guaranty Trust Company of New York(R 135). Although
he had the records of that bank examined for any transactions its foreign exchange department might have had in
Brazilian milreis between October 1 and October 7, 1935
(R. 135, 144), and the records included the entries of any
transactions on October 7 (R. 149, 162), he failed to testify
to an actual transaction of any kind or amount in the New
York market at any time during that period (or any other
time), in cable transfers payable in Brazilian milreis (R.
159, 175). He testified only as to three credit tickets for
checks issued showing sales of three drafts (R. 167), i. e.,
Guaranty Trust Company checks, two on October 3 and
one on October 5 (R. 168; Apl. Exhs. 2A, 2B, and 20, for
identification, R. 169A, not admitted in evidence as they
did not represent transactions on October 7, R. 169); a
few insignificant book entries of the Guaranty Trust Company (Apl. Exh. 4, R. 175A); and one of the Guaranty

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30
Trust Company's own figures which did not represent
actual transactions or even a firm bid (Apl. Exh. 3, R. 180;
R. 141, 144, 165). Apparently all of these were unrelated
to the importation of merchandise into the United States
(R. 154-5, 157). Not only did Mr. O'Brien fail to testify
to any transaction in cable transfers payable in milreis,
but he admitted that he could not say that any such cable
transfers could have been purchased in the New York
market on October 7, 1935 (R. 155).
None of the three documents of appellant's Exhibit 4,
which relate to book entries of October 7, 1935, is a record
of a cable transfer payable in milreis (R. 170, 175). They
are merely responses to entries that the Bank of Brazil
had made in the account that the Guaranty Trust Company
had with it (R. 169, 171, 173-4), one of which entries had
been made three months earlier (Apl. Exh. 4A; R. 173)
and the other two approximately three weeks earlier
(Apl. Exh. 4B, 4C, R. 175A; R. 174). One of them was a
reversal of a previous entry (Apl. Exh. 4A; R. 172) to
correct a clerical error (R. 173). Even in the opinion of
the witness the rates on these entries were selling not buying rates (R. 175). They had nothing to do with imports
(Apl. Exh. 4; R. 176).
Thus after a decade of litigation beginning in March
1939 (in a proceeding by the appellant against the Federal
Reserve Bank of New York in the Supreme Court of the
State of New York in which judgment was entered in favor
of the bank, affd. 260 A. D. 912, 23 N. Y. S. 2d 841 (1940);
affd. 286 N. Y. 583 (1941); cert. den. 315 U. S. 818 (1942);
rearg. den. 294 N. Y. 389 (1945); R. 28, 32, 56-7), and notwithstanding appellant's repeated assertions that the facts
were public knowledge (R. 28, 73, 104; Apl. Br., pp. 8, 21,
24), the appellant has failed to offer a single item of evidence of any purchase of cable transfers payable in Brazilian milreis, on October 7, 1935 or any other date, at any rate
other than that certified by the Federal Reserve Bank of
New York. The utmost that appellant could produce was
testimony as to three interbank transactions between two
correspondent banks having nothing to do with payment

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31
for imports. In contrast to the many millions in dollars of
commercial transactions, one of the entries was for the
sum of $3.82 (Apl. Exh. 4B; R. 177); another for forty-six
cents (Apl. Exh. 40; R. 177); and the other was for six
cents (Apl. 4A; R. 176). This is eloquent of the fact that
there was no actual transaction, in cable transfers payable
in Brazilian milreis, in the New York market on October
7, 1935 at any rate other than the rate which was certified
by the Federal Reserve Bank of New York. Notwithstanding the conflicting statements in the appellant's brief (see
p. 10), counsel for appellant at one time in his argument
admitted that there was no such transaction at noon on
that date (R. 47).
In addition to the absence of evidence of any facts supporting the appellant's contentions, the absence of any
legal authority which sustains its contentions is indicated
by the quotation (R. 32-34) which appellant's counsel
apparently relies upon as his primary and best authority
(Apl. Br., pp. 3-4; R. 34, 74, 136, 151). This is an irrelevant
and hypothetical passage taken from a brief, in a lower
New York court (R. 32), which was filed in support of the
motion to dismiss the petition in the above mentioned
proceeding of March 1939. The Barr case confirmed that
the argument contained in the passage was untenable.
(4) Summary.
Stated briefly, the appellant, without support in the
Record or citation of controlling legal authority, seeks on
this appeal (a) to nullify completely, as applicable to the
facts presented in this case, the express provision of section 522(c) that the Federal Reserve Bank of New York
shall calculate a rate of foreign exchange when there is no
actual rate for cable transfers exactly at noon, and (b) to
overrule the Supreme Court of the United States as to
(1) the discretionary authority of the Federal Reserve
Bank of New York, (2) the finality of the rates certified
by it to the Secretary of the Treasury, and (3) (as held in
Marbury V. Madison, supra, and later cases p. 21, supra)

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32
the authority of executive officers of the Government and
of its executive agencies to exclude from evidence records
and correspondence the disclosure of which they conclude
would be inimical to the interests of the Government.

Conclusion.
The decision of the United States Customs Court should
be affirmed.
Respectfully submitted,
WALTER S. LOGAN,
Attorney for Federal Reserve Bank
of New York, Amicus Curiae.
RUFUS J. TRIMBLE,
LYON BOSTON,
Of Counsel.
Dated: July 8, 1949.

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COURT OF APPEALS
OF THE STATE OF NEW YORK

In the Matter of the Application
of
ARMAND SCHMOLL, INC.,
Petitioner-Appellant,
against
THE FEDERAL RESERVE BANK OF
NEW YORK,
Respondent.

RESPONDENT'S BRIEF IN OPPOSITION TO
MOTION FOR REARGUMENT
More than three and one-half years ago, this
Court decided that the courts of the State of New
York were without jurisdiction to issue orders to
respondent as a Federal agency performing a Federal governmental function under a Federal statute within a field from which the State government is excluded. In so holding, this Court followed the law as interpreted by an unbroken and
time honored line of decisions of the Supreme
Court of the United States. The Court handed
down its decision in October, 1941.
Subsequently, the appellant sought a review of
this Court's decision by the Supreme Court of the
United States on petition for writ of certiorari.
The petition was denied (315 U. S. 818).
Now comes the appellant—more than three years
later—and asks permission to reargue the case
before this Court. It bases its plea for reargument on the fact that there was decided by the

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2
United States Supreme Court on February 5,
1945, the case of Barr v. The United States of
America (see Law. ed. Advance Opinions, Vol. 89
—No. 8, pp. 515-524). It claims that the decision
in the Barr case in some way now requires a different decision in the case at bar.
Even if the Barr case could be construed as
changing the law as previously interpreted by this
Court, that would not justify a re-argument or reopening of this case after the expiration of three
and one-half years. It is a principle of general
acceptance that a subsequent decision by a higher
court inconsistent with a decision sought to be
reviewed does not constitute grounds for a rehearing. See Scotten v. Littlefield, 235 U. S. 407;
Miller v. McCutcheon, 117 N. J. Eq., 123, 175 Atl.
155; also, Note at 95 A. L. R. 708.
A mere reading of the Supreme Court's decision
in the Barr case, however, will show that that decision had nothing whatever to do with the issue
presented in the case at bar.

POINT

The decision in the Barr case in no way affects or touches upon the jurisdictional question decided by this Court in the case at bar.
The question decided by this Court in the case
at bar was solely a question of jurisdiction or
power of the State court. This Court merely held
that a State court has no jurisdiction to issue
orders or directions to an instrumentality of the
Federal Government in the performance of its
Federal statutory duty. Under the United States
Tariff Act, the Federal Reserve Bank is authorized and required to certify daily to the Secretary
of the Treasury the "buying rate for cable trans-

'3
fers", which under the statute was thereupon to
be published by the Secretary of the Treasury
and used in the computation of the dollar value
to be placed upon imports in computing customs
duties. The appellant claimed that the Federal
Reserve Bank had certified, on the occasions in
question, the wrong rate for Brazilian milreis
exchange, and brought a proceeding in the nature
of mandamus under Article 78 of the Civil Practice
Act, asking the New York State court to direct the
Federal Reserve Bank to certify a different rate
than the one it had certified. The Special Term
held that the State court had no power to direct
the Federal Reserve Bank in exercising this func*tion as an instrumentality of the Federal Government. This decision was unanimously affirmed by
the Appellate Division and then affirmed by this
Court. The decision of this Court is clearly expressed as follows in the opinion written by Chief
Judge Lehman:

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"Under the United States Tariff Act of
1930(Ch.497; 46 Stat. 739 U. S. Code, tit. 31,
§ 372), the Federal Reserve Bank of New
York is authorized and required, under specified conditions, to determine and certify daily
to the Secretary of the Treasury 'the buying
rate for cable transfers.' The statute directs
that such determination shall be made in manner defined in the statute. Claiming that the
Federal Reserve Bank has failed to determine
the buying rate in manner directed by the
Federal statute, the appellant has brought
proceedings under article 78 of the Civil
Practice Act to compel the Federal Reserve
Bank to make its determination in manner
provided by law. The proceedings have been
dismissed on the ground that the State courts
have no jurisdiction to issue orders or directions to the Federal Reserve Bank in the performance of its statutory duty.

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"The Federal Reserve Bank is a Federal
agency exercising powers conferred by federal statute and performing duties imposed
upon it by federal statute in a field which,
under the Constitution of the United States, is
within the sole and exclusive jurisdiction of
the federal government. In the case of McClung v. Silliman (6 Wheat.[U. S.] 598), the
Supreme Court of the United States declared
in unambiguous and emphatic language that
the State court is without power to give such
directions to a federal officer acting under a
federal statute within a field from which the
State government is excluded. No case has
been cited to us where a State court has since
that time assumed to give such directions.
Nor has the Supreme Court of the United
States in any opinion or decision cast doubt
upon the scope of its decision in that case."
The Court will thus recall that the only question
passed upon by this Court was the jurisdictional
question, and this was decided in accordance with
a long line of decisions of the Supreme Court of
the United States.
The case of Barr v. The United States of America, on which the appellant now relies, has nothing
whatever to do with this jurisdictional point. The
Barr case was brought in the United States Customs Court and the point decided was briefly as
follows:
There the Federal Reserve Bank, in view of the
special circumstances, had certified to the Secretary of the Treasury two rates of exchange for the
British pound—one a so-called "official" rate,
and the other a so-called "free" rate. The Secretary of the Treasury had published only the "official" rate, and the Collector of the Customs had
used that rate in assessing the customs duties.
The Court held that on the facts of that case, including particularly the fact that the goods had
been purchased with pounds sterling exchange

5
bought at the "free" rate, their value in dollars
should be computed at the "free" rate rather than
the "official" rate that the Secretary of the Treasury and the Collector of Customs were acting illegally in insisting on the assessment at the "official" rate and that the importer had a right in the
Customs Court to have the overassessment corrected. The only question involved was the propriety of the rate used in assessing the duty. No
question of the jurisdiction of State courts was
involved in the case, or referred to in any way in
any opinion in any of the three courts which
considered the case.
Appellant, however, resorts to the following
argument on this motion: It contends that the
Supreme Court decided in the Barr case that the
Bank must certify two rates—namely, an "official" rate and a "free" rate,—and it then contends that the respondent in the case at bar having
certified only one rate, the State court must now
compel it to certify another rate. Both contentions are utterly fallacious.
1. First of all even if the Court in the Barr
case had held that it was the duty of the Bank to
certify the "free" rate as well as the "official"
rate, there is nothing whatever in the decision or
opinion to indicate that a State • court has the
power to compel the certification of the additional
rate.
Starting from the fallacious premise that the
Barr case holds that the Federal Reserve Bank
was required to certify both the "official" and the
"free" rate of exchange, appellant argues that
the State court could order it to certify another
rate than the one which it has already certified.
It argues that this would be compelling it merely
to perform, and not compelling the manner of
performance. It then contends that the State

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6
court'is only without power to compel the manner
of performance. We are unable to follow its reasoning. Even if there were any grounds for this
distinction, certainly in compelling the Bank to
certify another rate in addition to the one already
certified, this Court would be compelling the manner of performance of this Federal function.
Appellant made exactly the same argument on the
previous appeal to this Court, and this Court rejected it. As we there pointed out, respondent
had acted by certifying certain rates of exchange
to the Secretary of the Treasury on the dates in
question, and the appellant was asking the State
court to direct it to act in a different manner and
certify another rate of exchange (see pages 30-32
of Points of Respondent Federal Reserve Bank of
New York filed with this Court on the appeal).
Surely this is directing the manner of performance. If appellant's argument were accepted, that
because respondent has acted wrongly (according to appellant's contention) it has not acted at
all, such argument could be made and used as a
basis to justify the State court's taking jurisdiction in any case where a Federal agent is claimed
to have performed improperly. It would nullify
the principle laid down by McClung v. Silliman,
6 Wheat. (U. S.) 598, relied upon by this Court,
and the other cases which follow it. The fact is
that, under the rule established by these cases, it
is immaterial whether the respondent has not
acted at all or has acted erroneously. In neither
instance has the State court power to direct performance of a Federal function.
McClung v. Silliman, 6 Wheat. (U. S.)
598;
Tarble's Case, 13 Wallace 397;
Ex parte Shockley, 17 Fed. (2d) 133.

7
2. The fact is, however, that the Supreme
Court in the Barr case did not hold that the
Federal Reserve Bank must certify two rates. In
that instance the Federal Reserve Bank had in
fact certified two rates and the Supreme Court
held that it was quite proper for it to do so. This
is very different from holding that the Federal
Reserve Bank was required to do so. The opinion
indicates that, on the contrary, the Bank had entire discretion whether to certify one or two rates,
and that its action in that respect was not reviewable even by the Federal court. The Supreme
Court said:
"Sec. 522(c) plainly gives discretion to the
Bank to determine the buying rate. And for
the reasons stated we cannot say that only one
buying rate must be determined and certified.
The exercise of the Bank's discretionary
power under § 522(c) is in the category of
administrative or executive action which this
Court held non-reviewable in Creamer v.
Arthur, supra (102 U. S. 612) and in Hadden
v. Merritt,115 U. S. 25, 27-28. And see United
States v. Bush & Co., 310 U. S. 371, 380."
3. Again, if the Supreme Court had held under
the circumstances of the Barr case and the particular regulations of the British Government there involved that the Bank was required to certify two
rates for the pound sterling, there is nothing in
the record of the Schmoll case before this Court
to indicate that the situation presented as to
Brazilian milreis exchange was at all parallel or
that the Bank was not entirely justified in exercising its discretion to certify the one rate which it
did certify.
The Schmoll case involved exports of hides
from Brazil in 1935 and 1936, whereas the Barr
case involved exports of woolens from Great
Britain in May,1940.

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8
The laws, regulations and practices affecting
foreign exchange and export controls have varied
greatly in different countries and in the same
countries at different times. This is a matter of
common knowledge and was recognized by the
United States Supreme Court in the Barr case.
As is said in the description of "exchange control" in an article by Mordecai Ezekiel, Economic
Advisor to the Secretary of Agriculture,in "Commercial Pan America—A Monthly Review of
Commerce and Finance" Volume X, Nos. 9 and
10, September and October 1941, at page 374:
"Not only do the exchange control systems
of the various countries where such are in
force differ widely, but policies within each
country change with bewildering rapidity".
Moreover, none of the essential facts which appeared in the Barr case appear in the Schmoll
case. For example, it was not alleged in the
Schmoll case that the imports were paid for
by the use of Brazilian milreis exchange bought at
the lower rate which petitioner sought to have
certified; nor that certain categories of merchandise imported from Brazil could be paid for
by the use of Brazilian milreis exchange purchased at one rate, and that other categories of
goods imported from Brazil could be paid for by
the use of such exchange purchased at another
and different rate. These facts were all found by
the United States Supreme Court in the Barr
case with respect to the use of British pounds
sterling exchange.
For the foregoing and other reasons it is apparent that, even if this Court were to disregard
the jurisdictional ground on which it based its
decision, the Schmoll case has no similarity to

the Barr case on the facts.

9
Moreover, the appellant did not contend in the
Schmoll case that the respondent bank should
have certified both an "official" rate and a "free"
rate, as was done in the Barr case. It contended
that the bank had certified the wrong rate, that
such certification was null and void and that the
bank should now certify a different rate as the
one and only effective rate in December, 1935,
and January and February, 1936.
POINT

The opinion of the United States Supreme
Court in the Barr case affirms that the determination by the Federal Reserve Bank of
foreign exchange rates under Section 522 (c)
of the Tariff Act is not subject to judicial review in any court, and thus confirms the correctness of the result arrived at by this Court
in the case at bar.
As an alternative ground for a dismissal of
the petition in the case at bar, we urged on the
appeal before this Court that under the decisions of the Supreme Court of the United States,
the action required of the Federal Reserve Bank
by this statute was of such an administrative or
executive character as not to be subject to any
judicial review. This Court did not find it necessary to pass upon this point, but dismissed the
petition on the ground that the State court in any
event did not have power to review or direct such
administrative action by a Federal agency. Now
comes the Supreme Court in the Barr case, corroborating our alternative contention above stated.

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10
In the majority opinion, Mr. Justice Douglas
states:
"The exercise of the Bank's discretionary
power under § 522 (c) is in the category
of administrative or executive action which
this Court held non-reviewable in Cramer v.
Arthur, supra (102 U. S. 612) and in Hadden
v. Merritt,115 U. S. 25, 27-28. And see United
States v. Bush Co., 310 U. S. 371, 380."
If the administrative act of the Federal Reserve
Bank is not reviewable at all, that puts an end to
the matter.

POINT

III

If appellant is entitled to relief it is to be found
in the tribunals established by the laws of Congress to grant relief in customs matters.
Appellant pleads that unless this Court grants
the relief which it seeks it will be remediless. It
made precisely the same argument to this Court
on the original appeal. Even if the argument
were valid this fact would not confer on the State
court a jurisdiction which it does not under the
law possess.
The fact is, however, as we pointed out on
the appeal, that Congress in the Tariff Act
itself has provided a. very comprehensive system
for review of all matters arising in connection
with Customs levies. The Tariff Act of 1930 is a
legislative enactment complete in its field and that
statute contains in Sections 514 and 515 a complete system for review of the actions by the Collector in levying duties; first by the Collector himself, then by the United States Customs Court and

11
then by the United States Court of Customs and
Patent Appeals. Section 514 specifically provides
that the subjects for review shall be:
"all decisions of the collector, including the
legality of all orders and findings entering
into the same, as to the rate and amount of
"
'
duties chargeable,
Section 514 of the Tariff Act of 1930; 19 USCA,
Section 1514.
The recent decision of the Supreme Court of
the United States in the Barr case serves to emphasize the fact that the Customs courts are open
to the appellant in which to seek relief. Mr. Justice Douglas, writing for the majority of the
Supreme Court, states:
"Congress has granted judicial review of
the decisions of the collector including the
legality of the orders and findings entering
into the protested decision. Secs. 514-517.
If the decision of the collector contravenes the
statutory scheme and disregards rights which
Congress has bestowed, the fact that he acts
pursuant to the directions of the Secretary
does not save his decision from review."
Surely if an erroneous direction from the Secretary of the Treasury "does not save" the Collector's decisions from review in the Customs
courts, an erroneous determination by the Federal
Reserve Bank will not save the Collector's decision
in appellant's matter from review in the Customs
courts—except to the extent that the determination of the Federal Reserve Bank is of such an
administrative and executive nature as not to be
reviewable by any court as we have discussed
above.

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POINT IV
The motion for reargument should be
denied.
Respectfully submitted,
WINTHROP, STIMSON, PUTNAM & ROBERTS,
Attorneys for Respondent.
ALLEN T. KLOTS,
WALTER S. LOGAN,
RUFUS J. TRIMBLE,
Of Counsel.
May 11, 1945.

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WD
F IN FILES SECTIOil
AY 1 0 1943

IN THE

ftttrg

upretne Tout of Or
OCTOBER TERM, 1941

No. 928

IN THE MATTER OF
ARMAND SCHMOLL, INC., Petitioner,
V.
THE FEDERAL RESERVE BANK OF NEW YORK, Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE SUPREME
COURT OF NEW YORK

BRIEF FOR THE RESPONDENT IN OPPOSITION

ALLEN T. KLOTS,
Counsel for Respondent,
32 Liberty Street,
New York, N. Y.
WALTER S. LOGAN,
G. SCHUYLER TARBELL, JR.,
Of Counsel.

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INDEX

OPINIONS BELOW

PAGE
1

JURISDICTION

STATEMENT

QUESTION PRESENTED

STATUTES INVOLVED

ARGUMENT

POINT I. This Court has ruled conclusively that a governmental function such
as that imposed upon respondent by Section
522 (c) of the Tariff Act of 1930 may not
be directed or controlled by a State Court

POINT II. In view of the system of
customs courts set up by Congress, there is
particular reason for not permitting a State
court to issue mandamus in this case

POINT III. Petitioner's claim that if
mandamus is not afforded by the State court
no other remedy is available is no valid
reason for granting this certiorari

POINT IV. The authorities relied upon
by petitioner are not in point

CONCLUSION

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11
CITATIONS

CASES:

PAGE

Amalgamated Textiles, Ltd. v. United States, 84 F
(2d) 210
9
Amy v. The Supervisors, 11 Wall. 136
12
Arkansas v. St. Louis—S. F. Ry. Co., 269 U. S. 172
12n
Armand Schmoll, Inc. v. The Federal Reserve Bank
of New York, 286 N. Y. 503
2, 10
Bates v. Clark, 95 U. S. 204
In re Blake, 175 U. S. 114

11n
6

Claflin v. Houseman, 93 U. S. 130
Cottman Co. v. Dailey, 94 F. (2d) 85
In re Copenhaver, 54 Fed. 660
Cramer v. Arthur, 102 U. S. 612

10n
8
12
9

Defoe v. Town of Rutherfordton, 122 F. (2d) 342
De Lima v. Bidwell, 182 U. S 1

12
11n

In re Fassett, 142 U. S. 479
First National Bank v. Union Trust Co., 244 U. S.
416

11n
10n

Galveston etc. Ry. Co. v. Wallace, 223 U. S. 481
Gelston v. Hoyt, 3 Wheat. 246
Goldstein v. Somervell,170 N. Y. Misc.602,10 N. Y. S.
2d747
Gulbenkian v. United States, 186 Fed. 133
Guthrie v. Harkness, 199 U. S. 148

10n
11n

Hadden v. Merritt, 115 U. S. 25
Hines v. Lowrey, 305 U. S. 85
Hinkle v. Town of Franklin, 118 W. Va. 586, 191
S. E. 291

9
10n

Matter of Hurley v. National Bank of Middletown,
252 App. Div. 272

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8
10n

10n

111
CASES:
Kendall v. United States, 12 Pet. 524

PAGE
6, 7

Marion County Court v. Huidekoper, 134 U. S. 332 12n
Mayor etc. of The City of Helena v. United States
12
ex rel. Helena Waterworks, 104 Fed. 113
5,6,7,11
M'Clung v. Millman, 6 Wheat. 598
Minn. & St. Louis R. R. Co. v. Bombolis, 241 U. S.
10n
211
12n
Mobile v. Watson, 116 U. S. 289
10n
Murray v. Walker, 156 Ky. 536
Nichols v. United States, 7 Wall. 122
Northern Pacific Ry. Co. v. North Dakota, 250 U. S.
135
Oshinsky v. Taylor, 172 N. Y. Supp. 231
Panama R. R. Co. v. Vasquez, 271 U. S. 557
Patchogue-Plymouth Mills Corp. v. Durning, 101 F.
(2d) 41
People ex rel. Lorge v. Consolidated National Bank,
105 App. Div. 409
People v. Welch, 141 N. Y. 266
Pullman Co. v. Croom, 231 U. S. 571
Riccomini v. United States, 69 F. (2d) 480
Riggs v. Johnson County, 6 Wall. 166
St. Louis B. & M. Ry. Co. v. Taylor, 266 U. S. 200
St. Louis, Iron Mountain and Southern Ry. Co. v.
Taylor, 210 U. S. 281
Schall v. Newton, 217 App. Div. 171, aff'd 245 N. Y.
576
Second Employers Liability Cases, 223 U S 1
Ex parte Shockley, 17 F. (2d) 133
Smith v. Adsit, 16 Wall. 185
J. S. Staedtler Inc. v. United States, T. D. 49255, 25
C. C. P. A. 136
State ex rel. Wilcox v. Curtis, 35 Conn. 374

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8
11n
3n
10n
8
10n
10n
11n
8
12
10n
3
11n
10n
6
3
9
6

iv
CASES:

PAGE

Strohmeyer Arpe Co. v. Guaranty Trust Co., 172
App. Div. 16
Supervisors v. United States,4 Wall. 435

311
12n

Tarble's Case, 13 Wall. 397
Teal v. Felton, 12 How. 284
Territory v. Lockwood, 3 Wall. 236
Matter of Tuttle v. Iron National Bank,170 N. Y.9

6
11n
6
10n

United States v. Boutwell,17 Wall. 604
United States v. Klingenb erg,153 U. S. 93
United States v. Lee,106 U. S. 196
United States ex rel. Ranger v. New Orleans, 98 U. S.
381
United States v. Owlett, 15 F. Supp. 736

11n
9
11n

Von Hoffman v. City of Quincy,4 Wall. 535

12n

Warner Valley Stock Co. v. Smith,165 U. S. 28

11n

12n
6

CONSTITUTION AND STATUTES:
Constitution, Art. I, §§ 8, 10
5
Act of Oct. 10, 1940, c. 843, §1, 54 Stat. 1101; 28 U. S
C. A. §296
Act of March 3, 1911, c. 231, §188, 36 Stat. 1143, as
amended; 28 IT. S. C. A. §301
8
Act of August 5, 1909, c. 6, 28;§
36 Stat. 91, 105; 28
U. S. C. A. §308
8
Federal Reserve Act, §4; 12 U. S. C. A. §341
12
Federal Reserve Act, 1(k);§
12 U. S. C. A. §248.
11
9
Judicial Code, 237(b);§
28 U. S. C. A. §344(b)
Tariff Act of 1930, §§ 514, 515; 19 U. S. C. A. §§ 1514,
1515
8,9
Tariff Act of 1930, 52;§
31 U. S. C. A. §372...3, 4, 5,7,8, 9
New York Civil Practice Act, §1285
9
New York Civil Practice Act, §1293
4

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TREASURY DECISIONS:
Nos. 48064, 48100, 48155

PAGE
4

TEXTBOOKS:
Djorup, Foreign Exchange Accounting
3n.
High on Extraordinary Legal Remedies
6
Merrill on Mandamus
6,12
Rottschaefer on Constitutional Law
6
Spelling on Injunctions and Other Extraordinary
Legal Remedies
6
Willoughby, The Constitutional Law of the United
States
6

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IN THE

Supreme Court of the United States
OCTOBER TERM, 1941

No. 928

IN THE MATTER OF
ARMAND SCHMOLL, INC., Petitioner,
V
.

THE FEDERAL RESERVE BANK OF NEW YORK, Respondent.

ON PETITION FOR A WRIT OF CERTIORARI TO THE
SUPREME COURT OF NEW YORK

BRIEF FOR THE RESPONDENT IN OPPOSITION

Opinions Below
The opinion of Mr. Justice Samuel I. Rosenman, rendered at Special Term, Part I, of the Supreme Court of
New York, New York County, on June 12, 1939 (R. 28-29),
is not officially reported. Mr. Justice Rosenman's decision
was unanimously affirmed by the Appellate Division of the
Supreme Court, First Department, without opinion, 260
App. Div. 912 (R. 32), on November 8, 1940. The Appellate
Division granted leave to appeal to the New York Court of
Appeals, 260 App. Div. 1006 (R. 32-33), which thereafter

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2
affirmed the decision below. The opinion of the Court of
Appeals (R. 34-51), rendered October 16, 1941, is reported
in 286 N. Y. 503.
Jurisdiction
The order of the Supreme Court of New York on remittitur from the Court of Appeals was entered October 21,
1941 (R. 53). The petition for a writ of certiorari was
filed February 6, 1942, time to apply for such writ having
been extended by orders of this Court to February 7, 1942.
The jurisdiction of this Court is invoked under Section
237(b) of the Judicial Code, as amended by the Act of
February 13, 1925.
Respondent suggests that the basis for invoking the
jurisdiction of this Court has not been established because
it does not appear affirmatively from the record that a
Federal question was actually decided by the New York
Court of Appeals or that the judgment as rendered could
not have been given without deciding it. The New York
Court of Appeals is the ultimate authority as to what
remedies are provided by the constitution and laws of New
York State. The Court of Appeals has indicated in the
prevailing opinion in this case, not only that it regarded
as controlling the decisions of this Court to the effect that
a State court does not have the power to mandamus a
Federal officer, but also that it approved of this principle as
a matter of governmental policy. The Court said (R. 37):
"Assumption of such power would• hamper orderly government and ignore the division of the
fields of government of State and nation created by
the Constitution."
Petitioner itself argues at page 50 of its brief that the
question presented by the petition is in effect one of State
law. The determination by the Court of Appeals of a
question of State law is conclusive on all courts and peti-

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3
tioner's contention that "This Court should say to the New
York Supreme Court that it must determine and apply its
own remedies" is fallacious. Smith v. Adsit, 16 Wall. 185,
189; St. Louis, Iron Mountain and Southern Ry. Co. v.
Taylor, 210 U. S. 281, 285.
If, however, this Court should consider that a Federal
question was necessarily decided by the New York Court of
Appeals, the petition for a writ of certiorari in this case
should be denied because the only question presented has
heretofore been determined by this Court and the decision
of the Court of Appeals is clearly in accord with applicable
decisions of this Court which have stood over a period of
many years without any express or implied dissent.

Statement
Section 522(c) of the Tariff Act of 1930 (Act of June 17,
1930, c. 497, Title IV; 46 Stat. 739; 31 U. S. C. A. § 372)
provides that the Federal Reserve Bank of New York shall
determine the buying rates in the New York market for
cable transfers' payable in foreign currencies and, in any
case where there are no market buying rates for such cable
transfers, shall calculate such rates, and shall certify such
buying rates daily to the Secretary of the Treasury who
shall make them public at such times and to such extent
as he deems necessary. Such rates are certified for use in
converting foreign currency into currency of the United
States for the purpose of the assessment and collection
of duties upon merchandise imported into the United States.
On certain dates in 1935 and 1936, the Federal Reserve
Bank of New York, acting under Section 522 of the Tariff
Act of 1930, certified to the Secretary of the Treasury cerA "cable transfer" may be defined as an order transmitted by
cable to pay a certain sum of money to a designated payee. Djorup,
"Foreign Exchange Accounting" 1926, ed., p. 44; Oshinsky v.
Taylor, 172 N. Y. Stipp. 231, 232 (App. Term 1st Dept. 1918); and
see Strohmeyer & Arpe Co. v. Guaranty Trust Co., 172 App. Div.
16, 19 (1st Dept. 1916).

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4
thin rates of exchange for Brazilian milreis, which rates
were published by the Secretary of the Treasury in Treasury
Decisions 48064, 48100 and 48155 and were used by the
Collector of Customs at the Port of New York, pursuant to
this Section, in assessing the customs duties upon hides
imported by the petitioner from Brazil. In March 1939 the
petitioner sought to obtain an order of the courts of the
State of New York in the nature of a writ of mandamus
directing the bank to certify num pro tune new and different
rates of exchange for the milreis on the dates in question.
Respondent did not answer the petition but applied for an
order under Section 1293 of the New York Civil Practice
Act dismissing the petition on four specific objections in
point of law (R. 19-20). Although the properly pleaded
statements of fact set forth in the petition were deemed
admitted for the purpose of such application, the many
conclusions of law and characterizations of respondent's
acts which are included in the petition were not, of course,
to be taken as true.
The New York Court of Appeals has affirmed the order
dismissing the petition and held that the New York courts
do not have jurisdiction of the subject of such a proceeding.
Question Presented
The only question presented is whether the courts of
the State of New York have jurisdiction to direct or control
by mandamus the performance by Federal Reserve Bank
of New York, acting as a Federal agency, of its specific
governmental function under Section 522(c) of the Tariff
Act of 1930.
Statutes Involved
Section 522 of the Tariff Act of 1930 (Act of June 17,
1930, c. 497, Title IV; 46 Stat. 739; 31 U. S. C. A. § 372)
is printed at pages 26-27 of the Petition for Writ of Certiorari, and at pages 6-7 of the Transcript of Record.

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Argument
The only question here presented has heretofore been
unequivocally determined by this Court, and the decision
of the Court of Appeals of New York in this case is in complete accord with the applicable decisions of this Court.
POINT

This Court has ruled conclusively that a governmental function such as that imposed upon respondent
by Section 522(c) of the Tariff Act of 1930 may not be
directed or controlled by a State Court.
The Constitution vests exclusively in Congress the
power to impose customs duties and the power to regulate
the value of foreign coin in terms of money of the United
States (Art. I, §§8, 10). In order that the value of imported
merchandise expressed in currencies of foreign countries
may be converted into currency of the United States for the
purpose of the assessment and collection of customs duties,
Congress by Section 522 of the Tariff Act of 1930 has
directed the Federal Reserve Bank of New York to determine the rates of exchange of the respective currencies of
foreign countries daily and to certify such rates to the
Secretary of the Treasury. In determining and certifying
such rates, therefore, respondent is performing a governmental function pursuant to express direction of Congress
in a field in which the Federal Government has exclusive
jurisdiction.
This Court has decisively and consistently held that performance of such a function by a Federal agency may not
be directed or controlled by a State court. This was first
decided in the leading case of M'Clung V. Silliman,6 Wheat.
598. The headnote gives the holding of that case as clearly
as it could possibly be stated:
"A State Court cannot issue a mandamus to an officer
of the United States."

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6
This decision has been repeatedly followed by this and
other courts.
Tarble's Case, 13 Wall. 397 (1872);
Ex Parte Shockley,17 F.(2d) 133(D. C. N. D. Ohio
1926);
State ex rel. Wilcox v. Curtis, 35 Conn. 374 (1866);
Hinkle v. Town of Franklin, 118 W. Va. 586, 191
S. E.291 (1937);
Goldstein v. Somervell, 170 Misc. 602, 10 N. Y. S.
2d 747 (1939);
See
Kendall v. United States,12 Peters 524,617 (1838);
Territory v. Lockwood, 3 Wall. 236, 239 (1866);
In re Blake, 175 U. S. 114, 119 (1899);
United States v. Owlett, 15 F. Supp. 736 (1936).
No case has been cited by the petitioner in any of the courts
during any stage of this proceeding which has disputed
its authority.
The authority of the M'Clung case has been consistently
recognized and approved by writers of authoritative legal
texts. Willoughby on The Constitutional Law of the United
States, 1929 Edition, Volume I, page 201, says:
"That a State court has no power to issue a
mandamus or writ of certiorari to a Federal officer
is not questioned."
See also
Merrill on Mandamus,p. 271;
High on Extraordinary Legal Remedies, (3d ed.
1896) p. 107;
Spelling on Injunctions and Other Extraordinary
Remedies,(2d ed. 1901) p. 1268;
Rottschaefer on Constitutional Law, (1939) pp.
111-115.
The petitioner, in an elaborate discussion, undertakes to
show that this point was not involved in the Court's holding

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Federal Reserve Bank of St. Louis

7
and that if it was involved it was a moot question. Any such
contention is completely disproved by the unequivocal statement of this Court in Kendall v. United States,12 Peters 524,
at 617, that in the M'Clung case—
"the only question directly before the Court was,
whether a state court had authority to issue a mandamus to an officer of the United States, and this
power was denied."
Moreover the mere reading of the opinion in the M'Clung
case is a complete answer to the petitioner's argument.
The majority of the Court of Appeals in its opinion by
Chief Judge Lehman gives an analysis of that decision
which needs no amplification. Twelve New York judges,
including the Special Term judge, five judges in the Appellate Division, and six in the Court of Appeals, who heard
this case, evidently concurred in this interpretation of the
decision in M'Clung v. Silliman. So far as we know, only
the one dissenting judge in the Court of Appeals and the
petitioner have ever expressed a contrary view.
The principle of the M'Clung case applies even though
the duty of the Federal agent is merely ministerial. In that
case this Court clearly indicated that it regarded the duties
of the register as ministerial by reference at three points
in its opinion to "ministerial officers" (6 Wheaton 599, 600
and 605). Petitioner's repeated characterizations of the
duties of respondent in this case as ministerial are therefore wholly immaterial. It seems clear, however, that the
duties imposed upon respondent by Section 522(c) of the
Tariff Act are not ministerial but require the exercise of
judgment, discretion and special knowledge.
There is even more reason today for sustaining the
principle laid down by M'Clung v. Silliman than there was
at the time that case was decided. With the ever-increasing
number of activities of the Federal Government, with the
increase of its departments, bureaus and administrative
agencies, utter confusion would result if every State court

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Federal Reserve Bank of St. Louis

8
in the land could undertake to mandamus Federal officials
in the performance of their duties. Certainly no public
policy requires a reversal of the principle today. Lehman,
Ch. J., succinctly summarized the principle in the last paragraph of his opinion in this case (R. 37):
"No case has been cited which holds that a State
court may go outside that field and control the manner in which a federal agency performs or attempts
to perform its functions and duties under the Tariff
Act or other federal statute where the Federal government has exclusive jurisdiction. Assumption of
such power would hamper orderly government and
ignore the division of the fields of government of
State and nation created by the Constitution.
'
"

POINT II
In view of the system of customs courts set up by
Congress, there is particular reason for not permitting
a State court to issue mandamus in this case.
Congress, of course, has exclusive jurisdiction with
respect to tariff matters. Congress has set up a comprehensive system of customs courts. (Act of Oct. 10, 1940, c.
843, § 1, 54 Stat. 1101; 28 U. S. C. A. § 296; Act of June 17,
1930, c. 497, Title IV,§§ 514, 515;46 Stat. 734;19 U. S. C. A.
§§ 1514, 1515; Act of March 3, 1911, c. 231, § 188, 36 Stat.
1143, as amended; 28 U. S. C. A. § 301; Act of August
5, 1909, c. 6, § 28, 36 Stat. 91, 105, as amended; 28 U. S.
C. A. § 308.) Their jurisdiction over the administration
of matters relating to customs appears to be exclusive.
Patchogue-Plymouth Mills Corporation v. Durning, 101 F.
(2d) 41 (C. C. A. 2d 1939); Cottman Co. v. Dailey, 94 F.
(2d) 85, 88 (C. C. A. 4th 1938); Riccomini v. United States,
69 F.(2d) 480,484 (C. C. A.9th 1934); Gulbenkian v. United
States, 186 Fed. 133, 135 (C. C. A. 2d 1911); Nichols v.
United States, 7 Wall. 122, 129-131 (1869). Whether the
jurisdiction of such courts is exclusive or not, the remedies

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Federal Reserve Bank of St. Louis

9
obviously intended to be afforded by them are so broad
as to leave no basis for permitting the State courts to
invoke the extraordinary remedy of mandamus. It is not
only an elementary principle of law, but it is expressly provided in the New York statute, that mandamus cannot be
resorted to if the determination can be adequately reviewed
by some other court, body or officer (New York Civil Practice Act §1285).

POINT

III

Petitioner's claim that if mandamus is not afforded
by the State court no other remedy is available is
no valid reason for granting this certiorari.
As we have pointed out, the jurisdiction of the customs
courts in administering tariff matters is exceedingly broad.
They are expressly given jurisdiction to review the validity
of any orders or findings entering into the assessment of
customs duties (Act of June 17, 1930, c. 497, Title IV,
§§ 514, 515; 46 Stat. 734; 19 U. S. C. A. §§ 1514, 1515). The
petitioner contends, however, that its only adequate remedy
is in the State court. It asserts that the customs courts have
no jurisdiction to consider the validity of the rates certified
by respondent. There are, to be sure, decisions to the effect
that a determination by an executive agency of the rate of
exchange entering into a customs assessment is a matter
that is nonjusticiable. But these decisions are to the effect
that such a determination is nonjusticiable in any court.
Cramer v. Arthur, 102 U. S. 612, 616-617 (1880);
Hadden v. Merritt, 115 U. S. 25 (1885);
United States v. Klingenberg, 153 U. S. 93 (1894);
Amalgamated Textiles, Ltd. v. United States, 84
F. (2d) 210 (Cust. & Pat. App. 1936);
J. S. Staedtler, Inc. v. United States, T. D. 49255,
25 C. C. P. A. 136 (1937).

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Federal Reserve Bank of St. Louis

10
A determination which is nonjusticiable may not be reviewed
whether the question is presented in a customs court or in
a mandamus proceeding in a State court.
POINT

The authorities relied upon by petitioner are not
in point.
This case is governed by the principle embodied in
M'Clung v. Silliman. The authorities cited by petitioner
have no bearing on that principle and are clearly distinguishable from the case at bar. Armand Schmoll, Inc. v.
The Federal Reserve Bank of New York, 286 N. Y. 503,
at 508-509 (R. 36-37).
Cases cited by petitioner hold that an action may be
brought either in the State or in the Federal courts to enforce private rights created by Federal statute against a
person performing no governmental function.2 This case
does not involve such a right. It involves a governmental
function conferred by Congress upon an agency of the
Federal Government, and none of the cases cited by petitioner even intimates that such a function may be the subject of a mandatory decree of a State court.
Cases involving the jurisdiction of State courts of a
quo warranto proceeding3 to test the right of national banks
fin v. Houseman, 93 U. S. 130; Second Employers Liability
2 Cla
Cases, 223 U. S. 1; Minn. & St. Louis R. R. v. Bombolis, 241 U. S.
211; St. Louis B. & M. Ry. Co. V. Taylor, 266 U. S. 200; Galveston
etc. Ry. Co. v. Wallace, 223 U. S. 481; Panama R. R. Co. v. Vasquez,
271 U. S. 557; Hines v. Lowrey, 305 U. S. 85; People v. Welch, 141
N. Y. 266; Guthrie v. Harkness, 199 U. S. 148; Matter of Tuttle v.
Iron National Bank, 170 N. Y. 9; Matter of Hurley v. National
Bank of Middletown, 252 App. Div. 272; People ex rel. Lorge v.
Consolidated National Bank, 105 App. Div. 409; Murray v. Walker,
156 Ky. 536.
3 First National Bank v. Union Trust Co., 244 U. S. 416, 428.

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11
to exercise fiduciary powers as provided in Section 11(k)
of the Federal Reserve Act (Act of December 23, 1913, ch.
6, § 11(k); 38 Stat. 251, 262; 12 U. S. C. A. § 248), do not
involve any governmental functions of national banks;
and are distinguishable also on the ground that the statute
permits national banks to exercise such powers only "when
not in contravention of state or local law." The question
in such cases is, as pointed out by this Court in the very
case cited by petitioner, one of State law intended by Congress to be determined in the State courts.
Cases holding that State courts have jurisdiction to
give redress for wrongs committed by Federal officers or
agents claiming to act under authority granted by Federal
statute,4 or to prevent Federal officers or agents from going
outside their Federal statutory authority and jurisdiction,5
are clearly distinguishable from M'Clung v. Silliman and
from the case at bar. In each of the cases falling in those
categories the action of the State court was directed solely
at the defendant's acts as an individual outside the scope
of his Federal authority, and in no case did the court purport to assume jurisdiction over the acts of the defendant
as a Federal officer or agent. In the M'Clung case and in
the case at bar, on the other hand, the very hypothesis upon
which the State court's power was invoked was that the act
sought to be directed by order of the State court was an act
which respondent should perform within its authority as
a Federal instrumentality.
Cases holding that a mandamus proceeding against the
holder of a public office abates upon the death or resignation
of such officer,' do not support petitioner's assertion that
4 Bates v. Clark,95 U. S. 204; United States v. Lee, 106 U. S. 196,
Teal v. Felton, 12 How. 284; Gelston v. Hoyt, 3 Wheat. 246; De
Lima v. Bidwell, 182 U. S. 1; In re Fassett, 142 U. S. 479; Schall
v. Newton, 217 App. Div. 171, aff'd 245 N. Y. 576.
5 Northern Pacific Ry. Co. and Walker D. Hines, Director General of Railroads V. North Dakota, 250 U. S. 135.
° United States V. Boutwell, 17 Wall. 604; Warner Valley Stock
Co. v. Smith, 165 U. S. 28; Pullman Co. v. Croom, 231 U. S. 571.

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12
this proceeding was not directed against respondent in its
official capacity. The order sought in the case at bar would
necessarily be directed to respondent in its capacity as agent
of the Federal Government because it would require official
performance of respondent's statutory duty. By the same
token, any order of the State court directing respondent
nunc pro tune to certify new and different rates for
Brazilian milreis on the dates in question, and therefore
disregarding or annulling the action already taken by respondent in discharge of its statutory duty, would clearly
constitute a direction of the manner of performance of that
duty.
Cases in which petitioner claims Federal courts have
issued the writ of mandamus to State officers or agents are
not in point.7 Those cases held simply that where under
State practice the recognized method of enforcing a judgment obtained in a State court against a municipality was by
mandamus directing an officer to levy a tax to pay the judgment, a nonresident suitor who obtained judgment against a
municipality in a Federal court sitting in that State was
entitled under the Acts of Congress (1 Stat. 93, 276;4 Stat.
274;5 Stat. 499, 789) to the same means of execution. Amy
v. The Supervisors, 11 Wall. 136 (1870); In re Copenhaver,
54 Fed. 660 (D. C. W. D. Mo. 1893); Riggs v. Johnson
County, 6 Wall. 166, at 197-198 (1867); Defoe v. Town of
Rutherfordton, 122 F.(2d) 342 (C. C. A. 4th 1941); Mayor,
etc., of The City of Helena v. United States ex rel. Helena
Waterworks Co., 104 Fed. 113, at 117 (C. C. A. 9th 1900).
The cases stand for no such broad rule as petitioner contends. Merrill on Mandamus, §219.
Section 4 of the Federal Reserve Act (Act of December 23, 1913, ch. 6, §4, 38 Stat. 251; 12 U. S. C. A. §341)
7 Riggs v. Johnson County, 6 Wall. 166; Supervisors v. United
States, 4 Wall. 435; Von Hoffmam v. City of Quincy, 4 Wall. 535;
U. S. ex rel. Ranger v. New Orleans, 98 U. S. 381; Mobile v. Watson,
116 U. S. 289; Marion County Court v. Huidekoper, 134 U. S. 332;
Arkansas v. St. Louis-S. F. Ry. Co., 269 U. S. 172. ,

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Federal Reserve Bank of St. Louis

13
which permits respondent and the other Federal Reserve
Banks "To sue and be sued, complain and defend, in any
court of law or equity", gives to the courts of the State of
New York jurisdiction over the person of the Federal Reserve Bank of New York in a proper case. It does not, however, invest such courts with jurisdiction over an action or
proceeding against the Federal Reserve Bank of New York
involving a subject matter which is not within their jurisdiction. In an action in a State court to mandamus a Federal agency to perform a Federal function, the court may
very well have jurisdiction over the person of the agency
but its disability to act arises because of its lack of jurisdiction of the subject matter of the proceeding.
Conclusion
It is respectfully submitted that this Court has not been
shown to have jurisdiction to review the decision of the
New York Court of Appeals in this case. Even if this Court
were shown to have jurisdiction, however, the petition for
a writ of certiorari to the Supreme Court of New York
should be denied because the decision of the Courts below
is clearly in accord with the applicable decisions of this
Court.
Respectfully submitted,

ALLEN T. KLOTS,

Counsel for Respondent.
WALTER S. LOGAN,
G. SCHUYLER TARBELL, JR.,

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Federal Reserve Bank of St. Louis

Of Counsel.

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Federal Reserve Bank of St. Louis

(5127)

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Federal Reserve Bank of St. Louis

I REVD TN FILES SECTION1

.
MilY 10 1'14 Z

tly littitro

fttirrmr Tottri

OCTOBER TERM 1941

No.

IN THE MATTER
of
ARMAND SCHMOLL, INC.,
Petitioner and Appellant Below,
V
.

THE FEDERAL RESERVE BANK OF NEW YORK,
Respondent and Appellee Below.

PETITION AND SUPPORTING BRIEF FOR WRIT OF
CERTIORARI TO THE SUPREME COURT OF
THE STATE OF NEW YORK FOR
NEW YORK COUNTY

HERSEY EGGINTON
of Larkin, Rathbone & Perry,
Counsel for Petitioner,
70 Broadway,
New York, N. Y.
HERSEY EGGINTON,
GEORGE D. MUMFORD,
of Counsel.

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Federal Reserve Bank of St. Louis

INDEX
PAGE
I.

Summary Statement of the matter involved •• •

II. This Court's Jurisdiction to Review
III. Statutes involved

2
7
8

IV. Questions presented

V. Reasons relied on for the allowance of the writ 13
Prayer

25
APPENDIX

Relevant provisions of Section 522 of the Tariff Act of
26
1930
Relevant provisions of Article 78 of the New York Civil
27
Practice Act
Relevant provisions of Title 12, U. S. C., Section 341 30
Relevant provisions of Section 632 of Title 12, U. S. C.
(Jurisdiction by Federal Reserve Bank, a party) 30
TABLE OF CASES
Arkansas v. St. Louis S. F. Ry. Co., 269 U. S. 172....
18
Armand Schmoll, Inc. v. Federal Reserve Bamk, 286
N. Y. 503, 37 N. E. (2nd) 225
6 et seq.
Baird v. Supervisors Kings Cownty,138 N. Y. 95
Blair v. United States, 6 F. (2d) 484
Borax Consolidated, Ltd. v. Los Angeles, 296 U. 8.10

20
23
19

Calf Leather Tanners'Assn. V. Morgenthau,80 F.(2d)
536, cert. den., 297 U. S. 718
23
Claftin v. Houseman, 93 U. S. 130
15,18, 25
Conklin v. Newton, 2 Cir., 34 F. (2d) 612
23
Crowell v. Randell, 10 Pet. 368
19
De Lima V. Bidwell, 182 U. S. 1
Dudley v. Mayhew,3 N. Y. 9

23,24
22

Erie R. R. Co. v. Tompkins, 304 U. S. 64

20,21

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Federal Reserve Bank of St. Louis

TABLE OF CASES
PAGE

23
in re Fassett, 142 U. S. 479
14,25
F. H. A. v. Bwrr, 309 U. S. 242
14,25
Federal Land Bank v. Priddy, 295 U. S. 229
14
First National Bank v. Missouri, 263 U. S. 640
19
Fisher's Lessee v. Cockerell, 5 Pet. 248
15
Galveston etc. Ry. Co. v. Wallace, 223 U. S. 481
23
Giles v. Newton (D. C. E. D. N. Y.), 21 F. (2d) 484
21
Herman v. Board of Education, 234 N. Y. 196
19
Hickie v. Starke, 1 Pet. 98
15,20
Hines v. Lowrey,305 U. S. 85
18
Hoofnagle v. Anderson,7 Wheat. 214
Hoyt v. Gelston (1816), 13 Johns. R. 141, aff'd 3
23
Wheat. 246
Jaked v. Board of Education, 198 App. Div. 113, aff'd
21
234 N. Y. 591
25
Keifer & Keifer v. R. F. C., 306 U. S. 381
15,16
Kendall v. United States, 12 Peters 524
15,21
Lessin v. Boa/rd of Education, 247 N. Y. 503
Matter of Lewis v. Carter, et al., Individually and as
20
the Board of Parole for State Prisons,220 N. Y.8
14,16, 17,18,19
6,11,
M'Clung v. Silliman,6 Wheat. 598
18
Macon County v. Huidekoper, 134 U. S. 332
17
Marbury v. Madison,1 Cranch 172
19
Miller v. Nichols, 4 Wheat. 311
Minn. & St. Louis R. R. Co. V. Bombolis,241 U. S. 211 15,25
18
Mobile v. Watson,116 U. S. 289
19
530
Moore v. Robbins,96 U. S.
14
National Bank v. Commonwealth, 9 Wall. 353
18
Northern Pac. Ry. Co. V. North Dakota, 250 U. S. 135
Panama R. R. Co. v. Vasquez, 271 U. S. 557, aff'g 239
15
N. Y. 590
15
Y. 266
People v. Welch, 141 N.
Equitable Life Ass. Soc. v. Pierce, 187
People ex rel.
15,20
App. Div. 437, aff'd 229 N. Y. 514
20
People ex rel. Hilliker V. Pierce,64 Misc. 627
People ex rel. Solomon v. Brotherhood of Painters,
21
218 N. Y. 115
15
223 U. S. 605
Philadelphia v. Stimson,
20
Matter of Potts v. Kaplan, 264 N. Y. 110

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Federal Reserve Bank of St. Louis

TABLE OF CASES

lii
PAGE

Richbowrg Motor Co. v. U. S., 281 U.8. 528
Riggs v. Johnson County (1867),6 Wall. 166
Ripley v. Gelston, 9 Johns. R. 201
Riverside Oil Co. v. Hitchcock, 190 U. S. 316

23
18
23
18

St. Lowis B. d M. Ry. Co. V. Taylor, 266 U. S. 200 15,25
Schall v. Newton, 217 App. Div. 171, aff'd 245 N. Y
576
23
Second Employers Liability Cases, 223 U. S. 1
15
Simmons v. Wagner,101 U. S. 260
19
Smelting Co. v. Kemp,104 U. S. 636
19
Supervisors v. United States, 4 Wall. 435
18
United States v. Stone, 2 Wall. 525
18
United States v. United States Tariff Commission,6 F
(2d) 491
23
Waite v. Macy, 246 U. S. 606
23
William v. Norris, 12 Wheat. 117
19
55 Harv. L. Rev. 674

United States Constitution, Article VI, Clause 2

7,20

STATUTES
Section 522 of the Tariff Act of 1930 (Title 31,
U. S. C., Section 372)
2 et seq.
Article 78 of the New York Civil Practice Act

2 et seq.

Title 12, U. S. C., Section 341

9,13,20

Title 12, U. S. C., Section 632

Title 28, U. S. C., Section 344

Executive Order No. 6560 of January 15, 1934

Regulations of the Secretary of the Treasury issued
under said Executive Order, dated November 12,
1934

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Federal Reserve Bank of St. Louis

,-,ttprrtitr Tourt

ttirr littitrh -tatr,s

OCTOBER TERm 1941

No.

In the Matter
of
ARMAND SCHMOLL, INC.,
Petitioner and Appellant Below.
V.
THE FEDERAL RESERVE BANK OF
NEW YORK,
Respondent and Appellee Below.

PETITION FOR WRIT OF CERTIORARI TO THE
SUPREME COURT OF THE STATE OF NEW
YORK FOR NEW YORK COUNTY
To THE HONORABLE HARLAN FISKE STONE, CHIEF JUSTICE
OF THE UNITED STATES AND ASSOCIATE JUSTICES OF THE
SUPREME COURT OF THE UNITED STATES:
Your petitioner respectfully submits its petition for a
writ of Certiorari to review the decision of the Court of
Appeals of the State of New York, made on rernittitur the
judgment of the Supreme Court, affirming the decision of
the Appellate Division of the Supreme Court for the First
Department, which latter affirmed the resettled order of
Mr. Justice Rosenman at Special Term for New York
County, in this case, dismissing the Petition herein for
an order in the nature of an order of mandamus against
the Federal Reserve Bank of New York, and granting its,

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Federal Reserve Bank of St. Louis

2
the Respondent's, motion to dismiss as a matter of law
only viz., upon the ground that the Supreme Court of the
State of New York had no jurisdiction of the subject of the
proceeding, and specifically excepting any exercise of discretion.

Summary statement of the matter involved.
This is a proceeding brought by Petitioner under Article
78, Sections 1288 and 1289, of the New York Civil Practice
Act to obtain an order directing the Respondent, The Federal Reserve Bank of New York, a federal statutory agency,
resident in, and subject to process in the courts of, New
York, to perform a mandatory ministerial duty enjoined
upon it by Section 522 (c) of the Tariff Act of 1930, Ch.
497 (46 Stat. 739), U. S. Code, Title 31, Section 372; viz.,
to determine and certify nunc pro how to the Secretary of
the Treasury the buying rates in the New York market for
cable transfers payable in Brazilian milreis on three specified dates, in the manner prescribed by that Section.
This Petitioner seeks a review of the decision of the
Court of Appeals of the State of New York, made, on its
remittitur, the order and judgment of the New York Supreme Court, affirming the decision of the latter Court, and
also declaring it to be its own judgment, that, solely as
matter of law, the Supreme Court of the State of New
York was without jurisdiction to issue an order in the
nature of mandamus running against the Federal Reserve
Bank of New York to compel it to determine and certify
such buying rates actually prevailing in the New York
market for cable transfers of Brazilian milreis, in compliance with the mandatory and ministerial duty imposed
upon that Bank by said Section 522 (c).
In January and February 1936, the Petitioner imported
three lots of cattle hides from Brazil (R.* 5; Pet. par. 3),

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3
which were subject to an ad valorem duty of 10% under
Paragraph 1530 (a) of the Tariff Act of 1930. In accordance with Section 488 of that Act, they were appraised
in Brazilian milreis as of the dates of exportation from
Brazil, December 19, 1935, January 15 and February 8,
1936, at the respective sums of 166,210400, 532,315$690 and
1,187,615$350 (R. 6; Pet. par. 5). Under that Tariff Act
it was the duty of the Collector of Customs of the Port of
New York, prior to liquidating the duties on the Petitioner's
hides, to convert their appraised values from Brazilian
milreis into United States currency, and in so doing to use
the rates of exchange determined in the manner prescribed
by Section 522 (c) of the Tariff Act of 1930. By that Section, when the value proclaimed quarterly by the Secretary
of the Treasury "* * * varies 5 per centum or more from a
value measured by the buying rate in the New York market
at noon on the day of exportation, conversion shall be made
at a value measured by such buying rate. * * * For the purposes of this subdivision such buying rate shall be the buying rate for cable transfers payable in the foreign currency
so to be converted; and shall be determined by the Federal
Reserve Bank of New York and certified daily to the Secretary of the Treasury, who shall make it public at such
times and to such extent as he deems necessary. * * *"
(Section 522, subdivision (c)).
On the dates in question there was a variance of more
than 5% from the proclaimed values and, in liquidating the
duties on Petitioner's hides, the Collector converted their
appraised milreis value into United States currency at the
rates certified by the Respondent-Appellee (R. 8; Pet. par.
10). As shown by the Petition (R. 7-11, 14-15) and the
supporting affidavits (R. 17, 18, 19) the Respondent, purporting to comply with Section 522 (c), certified, as the
buying rates for cable transfers payable in Brazilian mil*Whenever "R", followed by numbers, appears herein it means the page
number of the Record herein.

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4
reis, amounts more than 40% in excess of the actual
rates, not only on the days in question but throughout the
months of December, 1935, January and February, 1936,
at the same time admitting that they were not the actual
rates and asserting that there were no New York market
buying rates for such cable transfers by characterizing each
rate it certified as: "Nominal rate. Firm rate not available" (R. 7-8; Pet. par. 9).
The Petition alleges that, as established by the affidavit
of an officer of one of the largest New York trust companies
(R. 9, 17, 18), an actual market existed in New York during the three months in which there were actual transactions in cable transfers payable in Brazilian milreis and
in which firm quotations of the buying rates for such cable
transfers were at all times obtainable; that the actual buying rates in the New York market on the three days in
question were $0.0555, $0.0560 and $0.0585 per milreis,
respectively; that the lowest market buying rate at noon
on any day during these three months was $0.0550 and the
highest was $0.0585 per milreis (R. 8, 9, 10). Schedules B
and C (R. 16, 17) and Exhibit A to affidavit (R. 18-19, fol.
27) giving the actual rates, show stability and lack of
fluctuation in them.
Respondent was fully informed of the actual market for
such cable transfers, receiving daily reports from its member banks in New York of rates of milreis cable transfers
(R. 10, 18, 19) and -was required by law to keep "currently
informed" as to all foreign exchange transactions and transfers of credits in its district. Every person having a principal place of business in Respondent's district who engaged
in such transactions and transfers, with minor exceptions,
was required by law to report "complete information relative thereto" to the Respondent. (See Executive Order No.
6560 of January 15, 1934, regulating transactions in foreign
exchange, transfers of credit and the export of coin and
currency, issued pursuant to Section 5 (h) of the Act of
October 16, 1917 (40 Stat. 411), as amended by Section 2

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Federal Reserve Bank of St. Louis

5
of the Emergency Banking Act of March 9, 1933 (48 Stat.
1), and Regulations of the Secretary of the Treasury issued
under said Executive Order on November 12, 1934.)
The actual market rates for the three months never exceeded $0.0585 per milreis, but the lowest rate certified by
Respondent during December, 1935, and January and February, 1936, was $0.08250 and the highest was $0.084700
(R. 9, 14, 15). The rates unlawfully certified by Respondent exceeded the actual market rates by an average of more
than two and three-quarters (234) cents, or some 50%
/
higher than the actual market rates (R. 15, 16).
The Petition shows that the use of the rates actually cer,
tified will cause the assessment of duties on Petitioner's
hides to exceed the actual duties imposable by law by approximately 40% (R. 12; Pet. par. 15); and that there is
no way in which Respondent can be forced to certify correct and lawful rates, other than by an order in the nature
of mandamus, which would finally determine the rights of
the parties (R. 12; Pet. par. 1(i).
Petitioner on January 29, 1939 duly demanded of Respondent the lawful action which was refused (R. 12, 14).
The present proceedings were thereafter, and within the
statutory period of four months after such demand and refusal, commenced to compel Respondent to comply with Section 522 (c) (R. 13, 14, 20; see Section 1286, infra, p.
10). Respondent, not answering and so admitting the material allegations of the Petition, moved under section 1293
of the Civil Practice Act of the State of New York to dismiss the petition as matter of law on four objections in
point of law (R. 19, 20), the principal and pertinent one
and that upon which the decisions below are based being
that; "(1) this Court (Supreme of New York) has no jurisdiction of the subject of the proceeding; * *
The Respondent's motion for dismissal of the Petition
was heard by Mr. Justice Rosenman at the Special Term of
the Supreme Court of New York who granted it as above
for lack of jurisdiction, and by a resettled order (R. 2-4),

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Federal Reserve Bank of St. Louis

6
specifically excluded any exercise of discretion (R. 4).
The other objections presented by Respondent were not
passed upon (R. 29) and the opinion of Justice Rosenman
shows the narrow and exclusive ground for his decision
(R. 27, 28, 29). Justice Rosenman's decision was upon the
theory that Petitioner sought to command the manner of
performance (actually prescribed by the statute) of a federal duty by a federal agent in the administration of the
customs laws, and that a state court possessed no such
jurisdiction because this Court had so decided in M'Clung
V. &Winton (6 Wheat. 598) by declaring "* * * that the
official conduct of an officer or agent of the United States
Government can only be controlled by the power that created him". And he also says that a state court may not
"* * * issue an order in the nature of mandamus to an
officer or agency of the federal government in relation to
the exercise of a federal governmental function by such
officer or agency". And he adds that the question is:
"It is whether the manner of performance of a specific
federal government statutory function by a federal statutory agency can be the subject of a decree of a state court."
The Special Term's exclusive holding of a lack of jurisdiction of the state court to prevent plain, unwarranted
violation by Respondent of the federal statute, without consideration of the other objections, was unanimously affirmed
without opinion by the Appellate Division of the First Department, which, however granted to Petitioner leave to
appeal to the Court of Appeals. The Court of Appeals affirmed the dismissal on the jurisdictional ground, Chief
Judge Lehman writing for the majority, all concurring except Conway, J., who dissented in a comprehensive opinion
the effectiveness of which makes untenable, as matter of
sound reasoning, the majority opinion. (Armand Schmoll,
Inc. v. Federal Reserve Bank, 286 N. Y. 503, 37 N. E.
(2nd) 225; R. 37-57.)
To the formal statement of reasons given by Justice
Rosenman, Chief Judge Lehman adds the pure assumption

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Federal Reserve Bank of St. Louis

7
of exclusive power in the federal government, although not
in terms given by the Tariff Act, by saying: "No case has
been cited which holds that a State Court may go outside
that field (that 'of its alleged jurisdiction') and control
the manner in which a Federal agency performs or attempts to perform its functions and duties under the Tariff
Act or other Federal statute where the Federal government
has exclusive jurisdiction. Assumption of such power would
hamper orderly government and ignore the division of the
fields of government of State and nation created by the
Constitution" (286 N. Y. 503, 509; R. 37).

II
This Court's jurisdiction to review.
The Judicial Code by Section 237 (b) (U. S. C. Title 28,
Section 344 (b) definitely provides for the review by this
)
Court of the final judgment rendered in this matter by
the Courts of New York. There are involved questions of
the construction of the Tariff Act of 1930, as construed by
the courts below, and of the validity under the State Constitution and local law of the Petitioner's substantive right
to an order in the nature of mandamus, and of the forms
of relief against the Respondent, and of the title, right,
privilege and immunities of the Petitioner under the Federal Tariff Act of 1930 and the Constitution of the United
States. These jurisdictional matters and rights are confirmed by Article VI, Clause 2, of the Federal Constitution
providing that "the Laws of the United States" (including
the Tariff Act of 1930) * * "shall be * * * the supreme
Law of the Land; and the Judges in every State shall be
bound thereby, any thing in the Constitution or Laws of
any State to the contrary notwithstanding." The courts
below have decided these federal questions of substance in
a way probably not in accord with the applicable decisions
of this Court.

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Federal Reserve Bank of St. Louis

8
The Court of Appeals' decision is dated October 16, 1941,
and the remittitur bears date October 17, 1941 (R. 52-3),
and the order of the Supreme Court for New York County
making the order of the Court of Appeals the order of that
Court was entered on October 21, 1941 (R. 53-54). The
time within which to petition to the Supreme Court of the
United States for a writ of certiorari to the Court of
Appeals or to the Supreme Court of the State of New York
would have expired on January 21, 1942, but an order
extending the Petitioner's time within which to apply for
said writ of certiorari to February 3, 1942, was granted
by Mr. Justice Jackson on January 16, 1942, and entered
in the office of the Clerk of this Court (R. 54), and a copy
served on the Respondent on January 21, 1942. An order
further extending the Petitioner's time within which to
apply for said writ of certiorari to February 7, 1942, was
granted by Mr. Justice Jackson on January 29, 1942 and
entered in the office of the Clerk of this Court (R. 55).

III
Statutes involved.
This case involves the interpretation and enforcement of
Section 522 of the Tariff Act of 1930, Ch. 497 (46 Stat.
739) U. S. Code, Title 31, Section 372; R. 6, 7). The relevant provisions of this Act are contained in Section 522 (c).
Under that Act, for the purpose of the assessment and collection of duties upon merchandise imported into the United
States, wherever it is necessary to convert foreign currency
of the United States under the conditions provided by Section 522 (c), conversion of such foreign currency shall be
made at a value measured by the buying rate in the New
York market, at noon on the date of exportation, for cable
transfers payable in the foreign currency so to be converted.
Section 522 (c) meticulously prescribes the method in
which such determination shall be made. By that Section

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Federal Reserve Bank of St. Louis

9
the Federal Reserve Bank of New York is authorized and
required to determine in the manner therein prescribed, and
to certify daily to the Secretary of the Treasury, the buying
rate for such cable transfers.
Section 522 (c) reads as follows:
"(c) Market Rate When No Proclamation.—If no
such value has been, proclaimed, or if the value so
proclaimed varies by 5 per centum or more from a
value measured by the buying rate on the New York
market at noon on the day of exportation, conversion
shall be made at a value measured by such buying rate.
If the date of exportation falls upon a Sunday or holiday, then the buying rate at noon on the last preceding
business day shall be used. For the purposes of this
subdivision such buying rate shall be the buying rate
for the cable transfers payable in the foreign currency
so to be converted; and shall be determined by the
Federal Reserve Bank of New York and certified daily
to the Secretary of the Treasury, who shall make it
public at such times and to such extent as he deems
necessary. In ascertaining such buying rate such Federal Reserve bank may in its discretion (1) take into
consideration the last ascertainable transactions and
quotations, whether direct or through exchange of
other currencies, and (2) if there is no market buying
rate for such cable transfers calculate such rate from
actual transactions and quotations in demand or time
'
bills of exchange."
Title 12, U. S. C., Section 341, is also involved, which
provides that the Federal Reserve Bank of New York "shall
have power— " " to sue and be sued, complain and defend,
in any court of law or equity". That this includes state
courts is confirmed by Section 632, of 12 U. S. C., which
permits but does not require the removal to the federal
courts of suits to which a Federal Reserve Bank is a party
and provides that no attachment or execution shall issue
against the respondent before final judgment in any suit,
in any state, county, municipal or United States court
(Appendix, p. 30).

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Federal Reserve Bank of St. Louis

10
Sections 1283, 1284, 1285, 1286, 1288, 1289, 1293, 1295,
1296, 1300 and 1306 of Article 78 (L. 1937, Ch. 526) of
the New York Civil Practice Act are also involved, as confirming and granting original jurisdiction to the Supreme
Court of the State of New York to entertain proceedings
in the nature of mandamus as part of the ordinary civil
remedies in the courts of the state. The relevant portions
of these sections are set out in the Appendix to the Petition
at pages 27-29, infra.
Section 1283 of Article 78 provides that "the classifications, and writs and orders of certiorari to review, mandamus and prohibition are hereby abolished. The relief
heretofore obtained by such writs or orders shall hereafter
be obtained as provided in this article."
Section 1284, biter alia, provides (1) "The expression
'body or officer' includes every court, tribunal board, corporation, officer or other person, or aggregation of persons,
whose action may be affected by the proceeding under this
article"; " * (3). "The expression `to compel performance of a duty specifically enjoined by law' refers to all
other relief heretofore available in a mandmus proceeding";
and (4) that "nothing in this article shall be deemed to
continue or establish distinct remedies."
Section 1286 provides, as to "Limitations of Time," that
"a proceeding under this article * * * to compel performance of a duty specifically enjoined by law, must be instituted by service of the petition and accompanying papers,
as prescribed in Section twelve hundred and eighty-nine of
this article within four months * * * after the respondent's
refusal, upon the demand of the petitioner or the person
'
whom he represents, to perform his duty
Section 1295 provides: "Upon the return day of the
application, if no triable issue of fact is duly raised by
the pleadings and accompanying papers, the court shall
forthwith render such final order as the case requires * *
Section 1300 provides that "the court shall render a final
order granting the petitioner the relief to which it deems
he is entitled, or dismissing the proceeding, either on the
merits or with leave to renew."

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Federal Reserve Bank of St. Louis

IV
The questions presented.
The questions fundamentally involved are as follows:
(1) Did the Courts below err in holding that Petitioner
sought to direct the manner of performance by a federal
agency of its statutory duties when the statute (Section
522 (c) of the Tariff Act of 1930) itself prescribed the
manner of performance and that consisted of merely reporting the rates for cable transfers in the New York market, which market registered automatically those rates, with
the prescribed duty and manner of performance being and
becoming purely mandatory and non-discretionary?
(2) Did the Courts below err in holding that the Supreme Court of New York was without jurisdiction to restrain Respondent from violating Section 522 (c) of the
federal Tariff Act or to compel it to comply with that Act
when the Tariff Act did not exclude State power to act;
and further err, with this held on the ground that this
Court had so decided in McClung y. Silliman, 6 Wheaton
598?
(3) Did the Courts below err in holding that the incorrect and false reporting of the buying rates in the New
York market for cable transfers by the Respondent, as a
federal agent, in violation of Section 522 (c) of the federal
Tariff Act of 1930, was a political and sovereign act of the
federal government which the Supreme Court of New York
was without jurisdiction to prevent or correct by mandamus
or other remedy?
(4) Is the Supreme Court of New York State, acting
under Article 78 of the New York Civil Practice Act, without jurisdiction, solely because it is a State court, to compel

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Federal Reserve Bank of St. Louis

12
the Respondent as a federal agent to perform the mandatory, ministerial duties imposed upon it by Section
522 (c) of the Tariff Act of 1930?
(5) Did the Courts below err in failing to hold that the
Congress, by expressly investing Respondent with the power
to "sue and be sued in any court of law or equity," withdrew, and intended to withdraw, from Respondent any
immunity as a federal agent, from the jurisdiction of State
Courts and intended to apply to it any of their usual civil
remedies and process to compel Respondent to comply with
Section 522 (c) of the Tariff Act of 1930?
(6) Did Congress by the Tariff Act of 1930 expressly or
by necessary implication confer on the federal Collector or
the Customs Courts having power to review his decisions
or on any other federal agency, exclusive jurisdiction to
enforce or to fail to enforce performance by the Respondent,
The Federal Reserve Bank of New York, of the mandatory,
ministerial duties imposed on it by Section 522 (c), or
invest the Collector or any other federal agency with any
jurisdiction or power whatever over Respondent to compel
such performance?
(7) In the absence of any such statutory, exclusive jurisdiction conferred upon the federal Collector or the Customs
Courts or any other federal agency, or of any adequate
statutory remedy given to persons whose vested rights
under Section 522 (c) have been violated by Respondent,
has the Supreme Court of the State of New York, in proceedings brought under Sections 1288 and 1289 of Article 78
of the New York Civil Practice Act and under the decisions of the New York Court of Appeals in mandamus or
similar proceedings, jurisdiction to compel Respondent to
perform its mandatory, ministerial duties imposed upon it
by Section 522 (c), or to restrain and otherwise correct
palpable violations thereof?

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(8) Did the Courts below err in holding, in effect, that
the use in the instant case of the local New York substantive statutory proceedings and its ordinary remedies in
a civil suit in the nature of mandamus under Article 78 of
the New York Civil Practice Act, to compel by order the
Respondent,—a federal governmental statutory agent resident in New York, subject "to sue and be sued" in the
Supreme Court of the State of New York, and designated
by Congress as such governmental agency for the sole and
express purpose of effectuating the mandatory provisions
of Section 522 (c) of the Tariff Act of 1930,—to comply
with the terms of such section and to perform its mandatory, ministerial duties as prescribed therein, constitutes
such a grave limitation by the New York Legislature and
Supreme Court upon such federal agent's powers and
ability to perform its mandatory, statutory duties and functions as not to have been intended by the Congress to have
been included in its general statutory withdrawal of such
governmental federal agent's immunity from suit under the
"sue and be sued" provisions of Title 12, U. S. C. Section
341.—and so imposes an implied limitation upon the general withdrawal by Congress from the Respondent of any
immunity from such suit and process?

V
The reasons relied upon for the allowance of
certiorari.
The grounds which call for the granting of the Writ of
Certiorari and of the relief sought by Petitioner are most
adequately and competently set forth by Judge Conway in
his careful and full dissenting opinion (286 N. Y. 503, at
509-525 R. 37-51). Those grounds there stated are hereby
adopted and incorporated in this Petition as if fully set
forth herein and are sufficient in themselves. However, in
addition, Petitioner briefly states the reasons, and in con-

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travention of those advanced by Chief Judge Lehman (286
N. Y. 506-509), in the following fashion:
Petitioner never sought to command the mam,n,er of performance of the duty of the federal agent, as declared by
the majority below (286 N. Y. 508-509; R. 34, 37). That
"manner" or rather method of performance is carefully prescribed by section 522 (c) of the Tariff Act itself, and Petitioner sought only to prevent the palpably unlawful act of
Respondent in violating its mandatory, ministerial, statutory duty, and thus to compel compliance with the federal
act. There is lack of jurisdiction in the State Court only
in the event that its judicial order would gravely interfere
with the performance of a governmental function or would
impair the authority or efficiency of the federal agent.
(F. H. A. v. Burr, 309 U. S. 242, 245, 249; First National
Bank v. Missouri, 263 U. S. 640, 659; Federal Land Bank
v. Priddy, 295 U. S. 229, 237; Compare National Bank V.
Commonwealth,9 Wall, 353, 361-2). Here neither objection
is good for Petitioner seeks only to have Respondent perform its statutory duty and keep within the law rather than
to permit it to clearly and intentionally violate it.
There is no language, either express or necessarily implied, in Section 522 (c) or in any other provision of the
Tariff Act of 1930 by "* * * which the state government is
excluded" (286 N. Y. at 506; R. 35); and McClung v.
Silliman (6 Wheat. 598) does not hold "* " * that the
state court is without power to give such directions to a
federal officer acting under a federal statute * * *". The
statutory duty to report the actual buying rates prevailing in the New York cable transfer market, even if misnamed a "governmental function", does not involve in any
wise a political or sovereign act of the federal government.
The rates are actually made by the New York market, by
the transactions had daily between buyers and sellers of
the exchange. No act of the sovereign makes them. Congress has required that what actually happens in the market be in effect automatically reported. There is no act
of the sovereign in this and on the part of the federal

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agent there is only a ministerial duty. Kendall v. United
States, 12 Peters 524, at pp. 609-610; Philadelphia V. Stim,
son, 223 U. S. 605, 619, 620; Lessin v. Board of Education,
247 N. Y. 503, 510, 511; People ex rel. Equitable Life Ass.
Soc. V. Pierce, 187 App. Div. 437, aff'd 229 N. Y. 514.
When the sovereign acts by lowering, through a law of
Congress, the rate of duty or the President under the
flexible tariff law lowers a specific duty, a citizen in a particular industry may be severely injured or his business
wholly destroyed. This, however, is without redress to
him, for the sovereign or people is acting in its political
capacity. This did not happen to the Petitioner, for its
injury is due to an unlawful act, a failure by the federal
agent to comply with the mandatory prescription of the
federal law.
There is here no basis for exclusion of the State Court
from administering the only effective remedy by mandamus
to enforce the federal act. There is concurrent jurisdiction
in the State to enforce federal laws by any appropriate form
of action or civil remedy provided by the state laws, unless
and until Congress by clear direction vests exclusive jurisdiction in federal authorities. Claflin V. Houseman, 93
U. S. 130, 136-7; Second Employers Liability Cases, 223
U. S. 1, 55-59; Minn. & St. Louis R. R. v. Bombolis, 241
U. S. 211, 221-2; St. Louis B. & M. Hy. Co. v. Taylor,
266 U. S. 200, 207-8; Galveston etc. Ry. Co. v. Wallace,
223 U. S. 481, 490; Panama R. R. Co. v. Vasquez, 271
U. S. 557; aff'g 239 N. Y. 590; Hines V. Lowrey, 305 U. S.
85; People v. Welch, 141 N. Y. 266, 272-3, 275.
In the Taylor case, 266 U. S. 200, Mr. Justice Brandeis
said at page 208:
"The origin of the right does not affect the manner
of administering the remedy. The grant of concurrent
jurisdiction implies that, in the first instance, the plaintiff shall have the choice of the Court. As an incident,
he is entitled to whatever remedial advantage inheres
in the particular forum. Minneapolis & St. Louis,
R. R. Co. v. Bombolis, 241 U. S. 211, 221. * * *"

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State courts, with the support of this Court, have been
continually furnishing relief to suitors against federal
agents for their violations of, or departures from, federal
statutes. So far as state courts are concerned, the Courts
below erroneously held that the only relief they cannot
grant is to prevent plain violation of or to enforce compliance with a federal statute imposing a mandatory and
ministerial duty. However, the federal courts of the District of Columbia may and do grant such specific relief
merely because Congress has vested in them the same
judicial power as exists in the State of Maryland under its
Constitution and laws. Kendall v. Mated States, 12 Peters
524. That, of course, includes mandamus and New York
must enjoy the same rights and power, unless clearly excluded by act of Congress (Conway, J., 286 N. Y. at 523,
524 R. 50, 51).
The case of McClung v. Sitlimaa, upon the alleged anthority of which the decisions below rest, does not hold
that state courts are without authority to issue mandamus
to federal agents. There the state court, on the Government's preliminary objection that there was no such jurisdiction, held to the contrary. On the later trial, on a
stipulation of facts, it decided against the applicant on the
merits. This Court affirmed the Ohio court's judgment on
the merits, thereby upholding the latter's jurisdiction.
What the McClung case actually decided is challenged,
of course. What the Court does by its mandate and judgment, rather than its opinion, must determine the true
holding of the case. At the foot of the opinion the Supreme
Court declares:
"Judgment. This cause came on to be heard, on
the transcript of the record of the Supreme Court of
the State of Ohio, for Muskingum County, and was
argued by counsel. On consideration whereof, it is
Adjudged and Ordered, that the judgment of the said
Supreme Court of the State of Ohio, be, and the same
is hereby affirmed, with costs; it being the opinion

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of this Court, that the said Supreme Court of the
State of Ohio, had no authority to issue mandamus in
this case."
If it had intended to hold flatly that no state court has
any power to issue an order or judgment against a federal
agency, because only the creator may control the created,
this Court would in terms have said so. Instead of dismissing for lack of jurisdiction, the mandate affirmed the
Ohio court's judgment and the added language of lack of
authority in the Ohio court "to issue a mandamus in this
case", simply refers to the lack of merits warranting no
mandamus "in this case". The full meaning of the phrasing
of the Court's mandate, by which the holding in the
McClung case must be determined, which directed an affirmance of the judgment of the Ohio Supreme Court dismissing on the merits McClung's motion for a mandamus,
but adding "it being the opinion, of this Court that the
said Supreme Court of the State of Ohio, had no authority
to issue a mandamus in this case" (italics supplied), is
highly important. (See review of this case in dissenting
opinion of Conway, J. (286 N. Y. at pp. 514-518; R. 42-45)).
The meaning of such phrasing was early explained by Chief
Justice Marshall in Marbury v. Madison (1 Cranch 137, at
p. 172) where he said of another mandamus case:
"When the subject was brought before the Court, the
decision was, not that a mandamus would not lie to
the head of a department directing him to perform
an act, enjoined by law in the performance of which
an individual had a vested interest; but that a mandanvu,s ought not to issue in that case; the decision
necessarily to be made if the report of the Commissioners did not confer on the applicant a legal right."
The McClung mandate necessarily means that the refusal
of mandamus was for lack of merit and not for lack of
jurisdiction. The affirmance of the Ohio court's judgment
—a dismissal on the merits—is conclusive as to that Court's
jurisdiction and means that, if on the merits the mandamus

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had been awarded, it would have been affirmed and sustained by this Court. This has been confirmed in a later
state court case, where, instead of dismissing for lack of
jurisdiction, this Court reversed but remanded proceedings
to the state court, thereby implying and affirming jurisdiction (Northern Pac. Ry. Co. v. North Dakota, 250 U. 8.
135, 152.)
Moreover, if, as asserted by the Court of Appeals, there
were any rule of exclusion laid down in the McClung case
(286 N. Y. 506-509; R. 34-37), based on the claim of warring sovereignties rejected in Claftin V. Houseman, 93 U. S.
136-7, that the federal jurisdiction excludes state interference, such rule must be reciprocal and then state jurisdiction would preclude interference by federal authorities
or courts with state duties and officers.
The Government, in its Brief in the Court of Appeals,
at page 14, concedes this rule of reciprocity by saying:
"Since the federal government and the state government
represent separate jurisdictions, it is only natural that the
governmental functions of the one are not subject to the
control of the courts of the other, except for the limited
control which federal courts may exercise to enforce the
Constitution and statutes of the United States as the supreme law of the land." This Court has, however, on the
contrary decided that federal courts might issue mandamus
compelling state or county officers to levy and collect taxes
under state laws the doing of which the state courts had
theretofore enjoined. (Riggs V. Johnson Cownty (1867), 6
Wall. 166; Supervisors V. United States, 4 Wall. 435; Mobile
v. Watson, 116 U. S. 289; Macon County v. Huidekoper,
134 U. S. 332; Arkansas V. St. Louis S. F. R4j. Co., 269
U. S. 172.) Of course, the relief sought by McClung, if
granted, would have interfered with a matter committed by
the statute exclusively to a federal officer invested with
quasi-judicial powers (Riverside Oil Co. v. Hitchcock, 190
U. S. 316, 324) or required him to violate the law (United
States v. Stone, 2 Wall. 525, 535; Hoofnagle v. Anderson,

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7 Wheat. 214, 215; Simmons v. Wagner, 101 U. S. 260;
Smelting Co. v. Kemp, 104 U. S. 636, 647; Moore v. Robbins, 96 U. S. 530); and so on the merits the decision was
proper and supportable (286 N. Y. at 517; R. 44). As
pointed out by Judge Conway (286 N. Y. at 517; R. 44):
"The Register had no power or duty to do the act which
McClung sought to force him to perform. (Simmons V.
Wagner, 101 U. S. 260, 261, 262; Borax Consolidated, Ltd.
v. Los Angeles, 296 U. S. 10, 17, 18.) For that reason no
court, State or federal, had power to grant the relief sought
in the McClung case."
This Court in the McClung case, on his writ of error,
had no jurisdiction of the federal question of the claimed
immunity of the Register, ,Silliman, as a federal officer,
from the jurisdiction of the Ohio court, and the part of
Justice Johnson's opinion relating thereto was, therefore,
dictum and of no binding authority. No federal question is
raised under the 25th section of the Judiciary Act and this
Court is without appellate jurisdiction, unless the federal
act alleged to create rights in plaintiff in error is shown by
the record to be applicable and to have been applied.
(Miller v. Nichols (1820), 4 Wheat. 311, 315; William V.
Norris, 12 Wheat. 117, 124; Hickie v. Starke, 1 Pet. 98, 99;
Crowell v. Randell, 10 Pet. 368, 391, 394-5; Fisher's Lessee
v. Cockerell, 5 Pet. 248, 258.) Only the federal question
of the construction of the Act of May 10, 1800 (2 Stat. 73),
as to the validity of the prior sales of fractions separated
by the navigable river Muskingum was raised by McClung's
writ of error. (See Record in this Court, in McClung v.
Silliman, 6 Wheat. 598 and, infra, pp. 57-60). McClung's
writ gave this Court only appellate jurisdiction to construe
the act as to the validity of those sales, but did not give it
jurisdiction to pass upon Silliman's claimed immunity, as a
federal officer, from the Ohio court's jurisdiction. No such
federal question was before this Court on McClung's writ of
error.
The Supreme Court of New York, under its Constitution
and laws, always had general jurisdiction at law and in

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equity, including power to issue mandamus or an order in
the nature of mandamus, which is confirmed by the New
York local law known as (new) Article 78 of the Civil
Practice Act, and the mandamus decisions of the New York
Court of Appeals, made applicable by the decision of this
Court. (Erie R. R. Co. v. Tompkins, 304 IT. S. 64.)
Article 78 contains no limitation upon a proceeding thereunder against a resident officer, agency or instrumentality
of the United States to compel performance of a duty imposed upon it by law, under an Act of Congress. As Clause
2 of Article Sixth of the Constitution of the United States
provides that acts of Congress "shall be the Supreme Law
of the Land; and the Judges in every state shall be bound
thereby, anything in the Constitution or Laws of any State
to the contrary notwithstanding" (See Hines v. Lowrey, 305
U. S. 85, at p. 91), it follows that the performance of a
duty specifically enjoined by Act of Congress upon a resident federal agency subject to suit in the Supreme Court
of the State of New York, may be compelled under Article
78 of the New York Civil Practice Act. The Respondent
is admitted to be such an agency. Congress has specifically
provided (Title 12, U. S. C. A. § 341) that a Federal
Reserve Bank shall have power— "* * * Fourth. To sue
and be sued, complain and defend in any court of law or
equity,".
In New York State, by the decisions of the Court of Appeals, governmental agencies performing a governmental
duty not judicial in its nature are not immune from liability for their torts or from liability in mandamus. Bai/rd
V. Supervisors Kings County, 138 N. Y. 95, 115, 116 (mandamus); Matter of Lewis v. Carter, et al., Individually and
as the Board of Parole for State Prisons, 220 N. Y. 8, 18
(mandamus); People ex rel. Equitable Assurance Soc. v.
Pierce, 187 App. Div. 437, aff'd 229 N. Y. 514 (mandamus);
Matter of Potts •v. Kaplan, 264 N. Y. 110, 117 (mandamus);
People ex rel. Hilliker v. Pierce, 64 Misc. 627 (mandamus); Lessin v. Board of Education, 247 N. Y. 503,

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510, 511 (tort); Herman v. Board of Education, 234
N. Y. 196 (tort); Jaked v. Board of Education, 198 App.
Div. 113, 118, aff'd 234 N. Y. 591 (tort). In the Lessin
case, supra, Lehman, J., writing for an unanimous court,
said:
"The State has created the Board of Education as a
corporate agent to discharge governmental functions.
No exemption from responsibility for dereliction in the
discharge of a corporate duty has been granted * * *.
The Board has *
' perform a duty imposed
failed to
upon it by law, and liability may be predicated upon
its own wrong."
Under the rule of Erie R. R. v. Tompkins, 304 U. S. 64,
78, the above decisions of the New York Court of Appeals
are the equivalent of New York statutes, as setting out the
local law that agencies performing a governmental duty
not judicial in its nature are not immune from liability for
their torts or immune from mandamus orders compelling
them to perform mandatory, ministerial duties, and so are
subject to proceedings under Article 78 of the Civil Practice Act.
In People ex rel. Solomon v. Brotherhood of Painters,
218 N. Y. 115, the Court of Appeals, by Seabury, J., said:
"Mandamus was originally regarded as a prerogative
writ. In modern times it has been somewhat assimilated to ordinary remedies. The power of the courts
to grant a remedy by means of this writ is derived
from the common law and from statutory enactments.
The common law right to issue the writ is limited to
the enforcement of some duty prescribed by law as
against persons and corporations within the jurisdiction." (Italics ours.)
The Tariff Act of 1930 vests no power in any of the
federal agencies, and especially not in the customs authorities and courts, to correct the violations (286 N. Y. at 513;
R. 41) and the departures from the law committed by
Respondent in exceeding its jurisdiction and openly failing

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to perform the mandatory and ministerial duties prescribed
by Section 522 (c) of the Tariff Act of 1930. Respondent
claimed below that, notwithstanding their lack of such
power, the Collector and the Customs Courts were given
exclusive jurisdiction in customs matters. In answer Judge
Conway, in his dissenting opinion in the Court of Appeals
in this case, at page 513 of 286 N. Y. (R. 41), said:
"To sustain this contention of respondent, would be
to say that a Congressional statute by implication excluded State courts from exercising jurisdiction beyond
the powers of the Collectors and the Customs Courts,
although such jurisdiction had been conferred upon
them by our laws. It is a sufficient answer to quote
the following from Dudley v. Mayhew (3 N. Y. 9, 15):
'It is very clear that when a party is confined to a
statutory remedy, he must take it as it is conferred;
and that where the enforcing tribunal is specified, the
designation forms a part of the remedy, and all others
are excluded. The rule is inapplicable, of course,
where property or a right is conferred, ictnd no remedy
for its invasion is specified. Then the party may sustaint his right or protect his property in the usual
manner. That is in such cases reasonably supposed to
be the intention of the Legislature, as it could not be
the design to confer a barren property or a fruitless
right, which could not be protected or enforced any-.
where.' (Italics supplied.)"
The Government, in its Brief in the Court of Appeals,
urged that the action of Respondent "* * * is not subject
'
to control by any court" (Point I, p. 17) and that it "*
is not subject to control by a state court because such action is in performance of a government function of the
United States" (Point II, p. 23), and that Congress has indicated an intent to restrict all reviews of customs questions to the United States Custom Court, "By the elaborate
and comprehensive system for the administration of the
customs laws which has been established, * * *" (Point III,
pp. 32-33), conceding, however, that: "This limitation is

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found, not in the words of any statute, but in the fact that
Congress has established a comprehensive system
(Brief, p. 15).
These points are sufficiently answered by Judge Conway
in his dissent (See 286 N. Y. at 516-8, R. 45, 46; ib. at 512-3,
R. 40, 41). Of course control by the federal courts has
frequently been exercised. (Waite v. Macy, 246 U. S. 606,
608-10; United States v. 'United States Tariff Commission,
6 F. (2d) 491, reversed on ground case had become moot,
in 274 U. S. 106; Calf Leather Tanners' Ass'n V. Morgenthan, 80 F. (2d) 536, 541-2, cert. den. 297 U. S. 718; De
Lima v. Bidwell (assumpsit against Collector of Customs
for exceeding his jurisdiction in exacting duties), 182 U. S.
1, 175-7, 179; In re Fassett, 142 U. S. 479, 486, 487 (libel);
Conklin v. Newton, 2 Cir. 34 F. (2d) 612, 514 (conversion
by Collector); Giles v. Newton (D. C. E. D. N. Y.), 21 F.
(2d) 848 (conversion by Collector); Compare: Hoyt V.
Gelston (1816), 13 Johns. R. 141, 151, aff'd 3 Wheat. 246,
334 (trespass against Collector of Customs for seizure of a
ship); Ripley v. Gelston (1812), 9 Johns. R. 201 (assumpsit
against Collector); Sc/tall v. Newton, 217 App. Div. 171,
aff'd 245 N. Y. 576 (conversion against Collector of Customs for breach of duty. Compare: Blab- V. United States,
6 F. (2d) 481).) These cases necessarily uphold the jurisdiction (not exclusive of state court jurisdiction) of federal
courts other than the Customs Courts to enforce by mandamus or injunction mandatory statutes involving the
Tariff.
The fundamental rule of a court's existence that, where
there is a right, it will find a remedy, has been ignored
in an instance of a right explicitly accorded to importers,
such as the Petitioner, by a federal statute flagrantly violated by a federal agent, the Respondent, to the great discrimination and grave injury of petitioner. (BM/ix v. United
States, 6 Fed. (2d) 484, 486; Richbourg Motor Co. V. U. S.,
281 U. S. 528; DeLima v. Bidwell, 182 U. S. 1, 176-177,
179.)

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The DeLima case, supra, was an action for money had
and received brought by an importer against the Collector
of the Port of New York, in the Supreme Court of the State
of New York and subsequently removed to the Circuit
Court, for duties illegally exacted on a cargo of sugar from
Porto Rico that was held by this Court not to be "imported
merchandise". There this Court said, at pages 176-177:
"Conceding * * " that no remedy exists under the
Customs Administrative Act, does it follow that no action will lie? If there be an admitted wrong, the
courts will look far to supply an adequate remedy. * * *
If the position of the Government be correct, the plaintiff would be remediless; and if a collector should
seize and hold for duties goods brought from New
Orleans, or any other concededly domestic port, to New
York, there would be no method of testing his right to
make such seizure. It is hardly possible that the owner
could be placed in this position."
(See also review of the instant case in 55 Harvard Law
Review at p. 674 (Feby. 1942) expressing the opinion that
the decision of the New York Court of Appeals was erroneous.)
Not only was no power given to the Collectors or the
Customs Courts by the Tariff Act of 1930, to compel the
respondent to comply with the mandatory provisions of
Section 522(c), and no adequate remedy was given by the
Act to persons whose vested rights were violated by the refusal of the respondent so to comply, and consequently no
basis whatever exists for the implication that Congress intended to confer exclusive jurisdiction upon the Collectors
and the Customs Courts or any Courts having power to review their decisions, to enforce Section 522(c); but Congress, by investing Federal Reserve Banks with the power
"to sue and be sued in any court of law or equity" expressly
withdrew and intended to withdraw from the respondent
any immunity from suit in State Courts and conferred upon
persons so suing the right to make use of any appropriate
state civil remedy to enforce the mandatory provisions of

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Section 522(c). (F. H. A. v. Burr, 309 U. S. 242, 245, 249;
Keifer & Keifer v. R. F. C., 306 U. S. 381; Federal Land
Bank v. Priddy, 295 U. S. 229, 237; Compare: Claflin v.
Houseman, 93 U. S. 130; St. Louis B. & M. R'y V. Taylor,
266 U. S. 200, 207-8; Minn. & St. Lowis R. R. Co. V. Born,bolis, 241 U. S. 211, 218, 221.)
The annexed Brief, hereby made a part of this petition,
as if fully set forth herein, presents thoroughly, in detail
and with sufficient supporting cases, the grounds upon
which petitioner relies in praying this Court for the allowance of a Writ of Certiorari in the above case.
WHEREFORE, your petitioner respectfully prays that a
writ of certiorari be issued out of and under the seal of
this Honorable Court directed to the Supreme Court of the
State of New York for New York County, commanding
such Court to certify and send to this Court for its review
and determination, at a date to be therein named, a full
and complete transcript of the record and all proceedings,
in the case entitled on its docket Index No. 6886-1939, In
the Matter of Armand Schmoll, Inc., Petitioner V. The Federal Reserve Bank of New York, Respondent; that said
order of the said Supreme Court of the State of New York
for New York County may be reversed by this Honorable
Court; and that your petitioner may have such other and
further relief in the premises as to this Honorable Court
may seem just and proper.
Respectfully submitted,
HERSEY EGGINTON Of
Larkin, Rathbone & Perry,
70 Broadway, New York, N. Y.
Attorneys for Armand Schmoll, Inc.,
Petitioner-Appellant.
Signed in behalf of the petitioner and its counsel on this
6th day of February, 1942.
By 1TERsEY EGGINTON.

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Appendix
STATUTES INVOLVED
Relevant Provisions of Section 522 of The
Tariff Act of 1930, as amended (U. S. C. Title 31 §372)
"Conversion of currency.
(a) Value of Foreign Coin Proclaimed by Secretary of
Treasury.—The value of foreign coin as expressed in the
money of account of the United States shall be that of
the pure metal of such coin of standard value; and the
values of the standard coins in circulation of the various
nations of the world shall be estimated quarterly by the
Director of the Mint and be proclaimed by the Secretary
of the Treasury quarterly on the 1st day of January, April,
July, and October in each year.
"(b) Proclaimed Value Basis of Conversion.—For the
purpose of the assessment and collection of duties upon
merchandise imported into the United States on or after
June 17, 1930, wherever it is necessary to convert foreign
currency into currency of the United States, such conversion, except as provided in subdivision (c), shall be made
at the values proclaimed by the Secretary of the Treasury
under the provisions of paragraph (a) of this section,
for the quarter in which the merchandise was exported.
"(c) Market Rate When. No Proclamation.—If no such
value has been proclaimed, or if the value so proclaimed
varies by 5 per centum or more from a value measured
by the buying rate in the New York market at noon on
the day of exportation, conversion shall be made at a value
measured by such buying rate. If the date of exportation
falls upon a Sunday or holiday, then the buying rate at
noon on the last preceding business day shall be used. For
the purposes of this subdivision such buying rate shall be
the buying rate for cable transfers payable in the foreign
currency so to be converted; and shall be determined by
the Federal Reserve Bank of New York and certified daily
to the Secretary of the Treasury, who shall make it public
at such times and to such extent as he deems necessary.

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27
Appendix.
In ascertaining such buying rate such Federal reserve bank
may in its discretion (1) take into consideration the last
ascertainable transactions and quotations, whether direct
or through exchange of other currencies, and (2) if there
is no market buying rate for such cable transfers, calculate
such rate from actual transactions and quotations in demand or time bills of exchange. (June 17, 1930, c. 497,
Title IV, §522, 46 Stat. 739.)"
Relevant Provisions Of Article 78
(L. 1937, Ch. 526) Of The New York Civil Practice
Act
The relevant provisions of Sections 1283, 1284, 1285, 1286,
1288, 1289, 1293, 1295, 1300 and 1306 of Article 78 of
(new) Article 78, (L. 1937, Ch. 526) of the New York
Civil Practice Act, are as follows:
"§1283. Classifications of certiorari to review, mandamus a/nd prohibition abolished. The classifications
and writs and orders of certiorari to review, mandamus
and prohibition are hereby abolished. The relief herebefore obtained by such writs or orders shall hereafter
be obtained as provided in this article. Whenever in
any statute reference is made to a writ or order of certiorari, mandamus or prohibition, such reference shall,
so far as applicable, be deemed to refer to the proceeding authorized by this article. * * *"
"§1284. Definitions.
"1. The expression 'body or officer' includes every
court, tribunal, board, corporation, officer, or other
person, or aggregation of persons, whose action may
be affected by the proceeding under this article."
"2. The expression 'to review a determination' refers
to the relief heretofore available in a certiorari or
a mandamus proceeding for the review of any act or
refusal to act of a body or officer exercising judicial,
quasi-judicial, administrative or corporate functions,
which involves an exercise of judgment or discretion."

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Federal Reserve Bank of St. Louis

28
Appendix.
"3. The expression `to compel performance of a duty
specifically enjoined by law' refers to all other relief
heretofore available in a mandamus proceeding."
"4. The expression 'to restrain a body or officer
exercising judicial or quasi-judicial functions from proceeding without or in excess or jurisdiction' refers
to the relief heretofore available in a prohibition proceeding."
"Nothing in this article shall be deemed to continue
or establish distinct remedies."
"§1285. When relief not available. Except as otherwise expressly prescribed by statute, the procedure
under this article shall not be available to review a
determination in any of the following cases: * * *
"3. Where it does not finally determine the rights
of the parties with respect to the matter to be reviewed.
"4. Where it can be adequately reviewed by an appeal
to a court or to some other body or officer."
"§1286. Limitations of time. A proceeding under
this article to review a determination or to compel
performance of a duty specifically enjoined by law,
must be instituted by service of the petition and
accompanying papers, as prescribed in Section twelve
hundred eighty-nine of this article, within four months
after the determination to be reviewed becomes final
and binding, upon the petitioner or the person whom
he represents, either in law or in fact, or after the
respondent's refusal, upon the demand of the petitioner
or the person whom he represents, to perform his duty,
as the case may be; * * *"
"§1288. Application for relief by petition; contents. The application for relief shall be founded upon a
petition, verified as in an action, which shall contain
a plain and concise statement of the material facts
on which the petitioner relies, may be accompanied by
affidavits and other written proof, and shall demand
the relief to which the petitioner supposes himself
entitled, in the alternative or otherwise."

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Federal Reserve Bank of St. Louis

29
Appendix.
"§1289. Notice of application; service. At least
eight days' notice in writing of an application for
relief under this article shall be served upon the
respondent, unless a shorter time is prescribed by an
order to show cause granted by the court to which
application is made or a judge thereof. A copy of the
petition and accompanying papers shall be served with
the notice or order to show cause. Service shall be
made in the manner provided for the personal service
of a summons in an action, unless a different manner
of service is provided by the order to show cause."
"§1293. Objections in point of law. The respondent
may raise an objection in point of law warranting the
dismissal of the petition, by setting the objection forth
in his answer or by applying to the court on the return
day for an order dismissing the petition as a matter
of law. If the respondent intends to apply for such
an order, he shall serve notice thereof upon the petitioner within the time allowed for answering. In the
event of the denial of such application, the court may
permit the respondent to answer, upon such terms as
may be just. * * *"
"§1295. Hearing upon the application. Upon the
return day of the application, if no triable issue of
fact is duly raised by the pleadings and accompanying
papers, the court shall forthwith render such final order
as the case requires. * * *"
"§1300. Final order. The court shall render a final
order granting the petitioner the relief to which it
deems he is entitled, or dismissing the proceeding,
either on the merits or with leave to renew. * * *
The court may also award such restitution as may be
just. In an appropriate case, the court may award
the petitioner the damages which he has sustained."
"§1306. Applicability of provisions governing actions. Except as otherwise expressly or by plain implication prescribed by statute, the provisions of statute
and rule applicable to practice or procedure in an
action applied to the proceeding under this article
so far as such provisions can be applied to its substance and subject matter without regard to its form."

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Federal Reserve Bank of St. Louis

30
Appendix.
Title 12, U. S. C., Section 341, provides as to the powers
and duties of Federal Reserve Banks, the relevant provisions of which are as follows:
"§341. General enumeration of powers. Upon the
filing of the organization certificate with the Comptroller of the Currency, a Federal reserve bank shall
become a body corporate, and as such, and in the name
designated in such organization certificate, shall have
power— * * * Fourth. To sue and be sued,
complain and defend, in any court of law or equity."
The relevant provisions of Section 632, of Title 12, U. S. C.
are as follows:
"§632. * * *, Jurisdiction where Federal reserve
bank a party. * * *
"Notwithstanding any other provision of law, all
suits of a civil nature at common law or in equity
to which any Federal Reserve bank shall be a party
shall be deemed to arise under the laws of the United
States, and the district courts of the United States
shall have original jurisdiction of all such suits and
any Federal Reserve bank which is a defendant in any
such suit may, at any time before the trial thereof,
remove such suit from a State court into the district
court of the United States for the proper district by
following the procedure for the removal of causes otherwise provided by law. No attachment or execution
shall be issued against any Federal Reserve bank or
its property before final judgment in any suit, action,
or proceeding in any State, county, municipal, or
United States court. (Dec. 23, 1913, c. 6, §25 (b)
June 16, 1933, c. 89, § 15, 48 Stat. 184.)"

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Federal Reserve Bank of St. Louis

IN THE

uprrmr (bud

fur 1tuifr1 'ftfrs

OCTOBER TERM, 1941
No.

ARMAND SCHMOLL, INC.,
Petitioner,
V.

THE FEDERAL RESERVE BANK OF NEW YORK.

ON PETITION FOR A WRIT OF CERTIORARI TO THE SUPREME
COURT OF TIIE STATE OF NEW YORK FOR NEW YORK COUNTY

BRIEF FOR PETITIONER

HERSEY EGGINTON,
of Larkin, Rathbone & Perry,
70 Broadway,
New York, N. Y.,
Attorneys for Petitioner.

HERSEY EGGINTON,
GEORGE D. MumFoRD,
of Counsel.

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Federal Reserve Bank of St. Louis

I
I

INDEX
PAGE

Official Report of Opinions below

Grounds of this Court's Jurisdiction

Statutory Provisions Involved

Statement of Facts

Questions Presented and Specification of Errors

Supplemental Statement

Summary of Argument

Argument
POINT FIRST—The Issues Really Involved

36
36

POINT SECOND—The Courts below erred in holding that

the Supreme Court of New York was without jurisdiction to order respondent to comply with Sec(
tion 522 c) of the Tariff Act of 1930, inasmuch
as the Supreme Court, although a state court, can
exercise its ordinary jurisdiction to compel respondent to comply with the federal law or to
cease violation thereof, which, as the Supreme
Law of the land, is also the law of the State of
New York and this because its order directing
respondent so to do would not in any way interfere with respondent's duty or destroy or impair
its official ability to perform its mandatory statutory function, and so would not encroach in
anywise upon the sovereignty of the federal government
.
(A) Concurrent Jurisdiction of State Courts...
(B) The reporting of the market rates in compliance with the tariff act is not and should
not be an exception to the rule of concurrent
jurisdiction
(C) The Congress has not granted exclusive jurisdiction over market rates to any federal
authority
(ID) The local law, including substantive remedies, made applicable by this Court

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39
39

47
50

INDEX
PAGE

POINT THIRD—McClung v. Silliman, 6 Wheaton 598,
relied upon by the Courts below, is not in point
and,to the extent of any holding,is an affirmation
by this Court of the jurisdiction of the state court
in a proper case to issue mandamus running to a
federal agent. As, on the stipulated facts of record
in the case the act of May 10, 1800 (2 Stat. 73)
was clearly not applicable to the lands in question
and gave Silliman, as register, no authority over
them and was not applied in this case, and as
Silliman omitted to obtain a writ of error, this
Court had no appellate jurisdiction under the
25th Section of the Judiciary Act to pass upon
the question of the Register's immunity from the
jurisdiction of the Ohio court. All statements in
the opinion as to the immunity of a federal agent
from the jurisdiction of a state court were, therefore, purely obiter.
So far as the plaintiff in error is concerned, he
properly appealed from the judgment on the
merits against him and the affirmance by this
Court on the merits of the judgment of the Ohio
State Court, which had determined preliminarily
it had jurisdiction to issue mandamus, necessarily
affirmed that jurisdiction. The judgment and
holding of the McClung case was proper and was
necessarily and simply to the effect that no court,
state or federal, has jurisdiction to compel a federal agent to exceed or disregard his plain, limited
statutory authority
PoiNT FOURTH—The order and judgment of the Supreme Court of the State of New York, as confirmed by the judgment of the Court of Appeals,
denying Petitioner's application for lack of jurisdiction to issue an order in the nature of mandamus running to respondent, requiring compliance with Section 522(c) of the Tariff Act of 1930,
should be reversed and the proceedings remanded
to the Supreme Court of the State of New York
with the direction to hear and decide the proceedings upon the merits
Conclusion
Appendix (Stipulation of Facts)

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Federal Reserve Bank of St. Louis

56
55
57

iii

TABLE OP CITATIONS

PAGE

Cases:

47
Allen v. Balto. & 0. R. R. Co.,114 U. S. 311
49
American Ry. Frog Co. v. Saven,101 Mass. 398
47
Arkansas v. St. Louis S. F.Ry. Co., 269 U. S. 172
Armand Schmoll, Inc. v. Federal Reserve Bank, 286
N. Y. 503, 37 N. E. (2d) 225
39, et seq.
Baird v. Supervisors Kings County, 138 N. Y. 95
Bates v. Clark, 95 U. S. 204
Blair v. United States, 6 F. (2d) 484
Board of Liquidation V. McComb,92 U. S. 531
Brady v. Work,263 U. S. 435

37,45
40,44
39,48,49
47
55

Calf Leather Tanners'Assn. v. Morgentha,u,80 F. (2d)
536, cert. den. 297 U. S. 718
38,48,56
Chicago, etc. Ry. Co. v. Sola/n,169 U. S. 133
45
Claflin v. Houseman,93 U. S. 130
40, et seq.
De Lima v. Bidwell, 182 U. S. 1
Dudley v. Mayhew, 3 N. Y. 9

37, 39, 40,48
39,42,48

Erie R. I?. Co. v. Tompkins, 304 U. S. 64
Eureka Pipe Line Co. v. Riggs, 75 W. Va. 353, 83
S. E. 1020

50
49

48
In re Fassett, 142 U. S. 479
38, 41,42,44
F. H. A. v. Burr, 309 U. S. 242
39,42,44
First National Bank v. Missouri,263 U. S. 640
First Nat'l Bank v. Union Trust Co., 244 U. S. 416..40,41,44
49
Fremont v. Crippen, 10 Cal. 211
38
Galveston etc. Ry. Co. v. Wallace, 223 U. S. 481
39, 43,46,55
Garfield v. Goldsby, 211 U. S. 249
40
Gelston v. Hoyt,3 Wheat. 246
41
Gutivrie v. Harkness, 199 U. S. 148
41,44,46
Hines v. Lowrey, 305 U. S. 85
41,52
Houston v. Moore,5 Wheat. 1
Matter of Hurley V. Nat'l Bank of Middleton, 252
41
App. Div. 272
I. C. C. V. Northern Pacific Ry. Co., 216 U. S. 538....

Jones v. Secwrities Commission, 298 U. S. 1

Keifer & Keifer v. R. F. C., 306 U. S. 381
Kendall v. United States, 12 Pet. 524

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Federal Reserve Bank of St. Louis

38,42
39, 43,46,49

TABLE OF CITATIONS
PAGE

46
Lane v. Hoglund,244 U. S. 174
Matter of Lewis v. Carter, et al., Individually and as
the Board of Parole for State Prison, 220 N. Y.
37, 43,45
8
Lichfield v. Register and Receiver, 9 Wall. 575
55
Louisville Cement Co. V. I. C. C., 246 U. S. 638
37,46
37,46
Macy v. Browne, 224 Fed. 359
43,45
Marbury v. Madison, 1 Cranch. 137
47
Marion County Court v. Huidekoper, 134 U. S. 332
Marquez V. Frisbie, 101 U. S. 473
55
35, et seq.
McClung v. Silliman,6 Wheat. 598
46
Merritt v. Welsh,104 U. S.694
37
Miguel v. McCarl, 291 U. S. 442
Minn. & St. Louis R. 1?. Co. v. Bombolis, 241 U. S
41, 42,46
211
46
Mobile v. Watson, 116 U. S. 289
41
Murray v. Walker, 156 Ky. 536
44
National Bank v. Commonwealth,9 Wall. 353
New Mexico v. Lane,243 U. S. 58
55
Northern Pacific Ry. Co. v. North Dakota, 250 U. S.
38, 40,41, 43,44
135
Ohio v. Thomas, 173 U. S. 276
Oneida Corn. Ltd. v. Oneida Game Trap Co., 168 App
Div. 769

45
48

Payne v. Central Pacific Ry. Co., 255 U. S. 228
37
Penn Gas Co. V. Public Service Comm., 225 N. Y. 397
45
Pennoyer v. McConnaughty, 140 U. S. 1
47
People v. Welch, 141 N. Y. 266
38, 39,42,44
People ex rel. Equitable Life Ass. Soc. v. Pierce, 187
App. Div. 437, aff'd 229 N. Y. 514
37
People ex rel. Hilliker v. Pierce, 64 Misc. 627
46
People ex rel. Sorge v. Consolidated Nat'l Bank, 105
41
App. Div. 409
Matter of Potts v. Kaplan, 264 N. Y. 111
37
Pullman Co. V. Groom, 231 U. S. 571
43
Reagan V. Farmers L. 41 T. Co., 154 U. S. 362
Riggs v. Johnson County (1867),6 Wall. 166

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Federal Reserve Bank of St. Louis

47
46

TABLE OF CITATIONS

V
PAGE

42
St. Louis B. M. Ry. Co. v. Taylor, 266 U. S. 200
&hall v. Newton, 217 App. Div. 171, aff'd 245 N. Y
40
576
47
Scott v. Donald,165 U. S. 107
Second Employers Liability Cases, 223 U. S. 1....41,42,46
45
Ex parte Shockley, 17 F. (2d) 133
47
Smythe V. Ames, 169 U. S. 466
46
Supervisors v. United States, 4 Wall. 435
Teall v. Felton, 1 N. Y. 537
Matter of Tuttle v. Iron Nat'l Bank,170 N. Y. 9
In re Tyler, 149 U. S. 164

40,44
41
4,7

43
United States v. Boutwell, 17 Wall. 604
40,44
United States V. Lee, 106 U. S. 196
46
U. S. ex rel. Ranger v. New Orleans, 98 U. S. 381
50
United States, Petitioner v. Pink
United States v. United States Tariff Commission, 6
56
F. (2d) 491
Von Hoffman v. City of Quincy,4 Wall. 535

37, 45,46,48
Waite v. Macy, 246 U. S. 606
43
Warner Valley S. Co. v. Smith,165 U. S. 28
44
Western Union Tel. Co. v. Henderson,68 Fed. 588
45
Western Union Tel. Co. v. James, 162 U. S. 650
45
Western Union Tel. Co. v. Milling Co., 218 U. S. 406
37,43,45
Wilbur v. Krushnic, 280 U. S. 306
41
Witnebel v. Loughman, 80 F. (2d) 222
Ex parte Young, 209 U. S. 123

Statutes:
Section 522 of the Tariff Act of 1930 (Title 31, U. S. C.,
34, et seq.
Section 372)
38,41
Title 12, U. S. C., Section 341
Title 12, U. S. C., Section 632

Title 28, U. S. C., Section 237

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Federal Reserve Bank of St. Louis

itinerittr Tourt of tip littitrb ftttrs
OCTOBER TERN' 1941
No.

IN IHE MAI1ER
of
ARMAND SCHMOLL, INC.,
Petitioner and Appellant Below,
V.
THE FEDERAL RESERVE BANK OF
NEW YORK,
Respondent and Appellee Below.

BRIEF IN SUPPORT OF PETITION FOR
WRIT OF CERTIORARI
The official report of the opinions delivered in the Court
of Appeals is contained in. 286 N. Y. 503-525. A copy is
printed at pages 34-52 of the Record. The opinion of Mr.
Justice Rosenman at Special Term was not reported, but a
copy appears at pages 28-29 of the Record.
The .Statement of the grounds of this Court's "Jurisdiction to Review" the Summary Statement of the Matter Involved," the "Statement of Facts," the "Statutes Involved"
and the "Questions Presented," contained in the annexed
Petition, are hereby referred to and repeated with the same
force as if herein set forth.

Questions Presented and Specification of Errors
The "Questions Presented" at pages 11, 12 and 13 of the
annexed Petition for writ of certiorari are the Questions
Presented and the assigned errors which Petitioner desires
to urge.

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Federal Reserve Bank of St. Louis

Supplemental Statement
The facts in addition to those stated in the annexed Petition may in their essentials be put briefly as follows: By
§ 522(c), of the Tariff Act of 1930 (June 17, 1930, c. 497;
IV, § 522(c) (46 Stat. 739); Title 31, U. S. C. § 372) it
became the statutory ministerial duty of Respondent to
certify daily to the Secretary of the Treasury the actual
buying rates in the New York market for cable transfers
payable in Brazilian milreis. The Petition shows that all
the daily transactions were duly reported, as required, to
the Respondent, and that the actual market rates, continuously prevailing throughout the three months covered
by the Petition were in the official possession and knowledge of Respondent, and that it was an actual New York
market and that such exchange could be had at firm rates
constantly throughout this period (R. (fol. 8) 8-11, 16-19
(fol. 8)). It appears that notwithstanding Respondent's possession of its official evidence to the contrary (see annexed
Petition for certiorari, pp. 4, 5), it certified daily a higher
rate than the actual New York market rates, characterizing each rate it certified: "Nominal rate. Firm rate not
available" (R. (fol. 8) 7-8, 9, 10). In substance the actual
market rates did not exceed $0.585 per milreis in this
period but the Respondent certified rates no lower than
$0.08250 and as high as $0.084700 (R. 8, 9, 10, 14, 15, 16,
17, 18, 19).

Summary of Argument
(1)
(2)

The Issues Really Involved.
The Courts below erred in holding that the Supreme
Court of New York was without jurisdiction to order
respondent to comply with Section 522(c) of the Tariff
Act of 1930, inasmuch as the Supreme Court, although
a state court, can exercise its ordinary jurisdiction to
compel respondent to comply with the federal law or
to cease violation thereof, which, as the Supreme Law
of the land, is also the law of the State of New York;

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Federal Reserve Bank of St. Louis

35
and this because its order directing respondent so to do
would not in any way interfere with respondent's duty
or destroy or impair its official ability to perform its
pandatory statutory function, and so would not encroach in anywise upon the sovereignty of the federal
government.
(A) Concurrent Jurisdiction of State Courts.
(B) The reporting of the market rates in compliance
with the tariff act is not and should not be an
exception to the rule of concurrent jurisdiction.
(C) The Congress has not granted exclusive jurisdiction over market rates to any federal authority.
(D) The local law, including substantive remedies, is
made applicable by this Court.
()
3

McClung v. Sillintan, 6 Wheaton 598, relied upon
by the Courts below, is not in point and, to the extent
of any holding, is an affirmation by this Court of the
jurisdiction of the state court in a proper case to issue
mandamus running to a federal agent. As, on the
stipulated facts of record in the case the act of May
10, 1800 (2 Stat. 73) was clearly not applicable to the
lands in question and gave Silliman, as register, no
authority over them and was not applied in this case,
and as Silliman omitted to obtain a writ of error, this
Court had no appellate jurisdiction under the 25th
Section of the Judiciary Act to pass upon the question of the Register's immunity from the jurisdiction
of the Ohio court. All statements in the opinion as
to the immunity of a federal agent from the jurisdiction of a state court were, therefore, purely obiter.
So far as the plaintiff in error is concerned, he
properly appealed from the judgment on the merits
against him and the affirmance by this Court on the
merits of the judgment of the Ohio State Court which
had determined preliminarily it had jurisdiction to
issue mandamus, necessarily affirmed that jurisdiction.
The judgment and h,old/ing of the McClung case was
proper and was necessarily and simply to the effect
that no court, state or federal, has jurisdiction to compel a federal agent to exceed or disregard his plain,
limited statutory authority.

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Federal Reserve Bank of St. Louis

36
(4)

The order and judgment of the Supreme Court of
the State of New York, as confirmed by the judgment
of the Court of Appeals, denying Petitioner's application for lack of jurisdiction to issue an order in the
nature of mandamus running to respondent, requiring
compliance with Section 522(c) of the Tariff Act of
1930, should be reversed and the proceedings remanded
to the Supreme Court of the State of New York with
the direction to hear and decide the proceedings upon
the merits.

ARGUMENT
POINT FIRST
The Issues Really Involved.
With the Respondent certifying rates on an average some
50% higher than the actual New York market rates prescribed, the issue in this case becomes and may be definitely
stated:
It is whether the Supreme Court of New York, solely
because it is a state court, is without jurisdiction to compel
the Respondent, a resident corporation of New York, to
perform the duties imposed upon it by a federal statute,
§ 522(c) of the Tariff Act of 1930, in the manner prescribed
and directed by that Statute.
It appears from the Act and from the Petition that these
duties were simply mandatory and ministerial. Respondent's only duty is to ascertain the buying rates in the New
York market at noon on each day, a simple arithmetical
calculation from market rates which at the time varied
only a few hundredths of a cent every day and from day
to day and report them to the Secretary of the Treasury.
Respondent, by its motion to dismiss, admitted not only
that the rates it certified were not the actual market rates
and, accordingly, that it exceeded its powers under the
statute, but that the actual New York market rates were
as set forth in Schedule B of the Petition (R. 16 (fol. 23)).

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Federal Reserve Bank of St. Louis

37
Mandamus or its equivalent is the proper means to correct these abuses of statutory power and courts may direct
compliance with a statutory mandate, even though their
interpretation of the statute prescribing the agent's jurisdiction may have the effect of requiring the agent to act
in a particular way. (Baird v. Supervisors, 138 N. Y. 95,
115, 116; Matter of Lewis v. Carter, Individually and as the
Board of Parole for State Prisons, 220 N. Y. 8, 18; People
ex rel. Equitable Life Ass. Soc. v. Pierce, 187 App. Div.
437, aff'd 229 N. Y. 514; Matters of Potts T. Kaplan, 264
N. Y. 111, 117-118; Louisville Cement Co. v. I. C. C., 246
U. S. 638 642, 644; Wilbur v. Krushnic, 280 U. S. 306, 318;
Miguel v. McCarl, 291 U. S. 442, 452, 456; Payne V. Central
Pacific Ry. Co., 255 U. S. 228, 238; I. C. C. V. Northern
Pacifw Ry. Co., 216 U. S. 538, 544-5.) With a market for
cable transfers actually continually existing in New York
there is no discretion vested in Respondent by the Tariff
Act. Respondent's duties prescribed by Section 522(c) are
mandatory, and it is a jurisdictional limitation upon the
Respondent's power that the rates it certifies must be the
buying rates for cable transfers payable in the foreign currency in the New York market at noon on each day (Waite
v. Macy, 246 U. S. 606, 608-10, aff'g Macy v. Brown, 225
Fed. 359, and cases there cited; I. C. C. V. Northern Pacific
Ry Co., 216 U. S. 538; De Lima v. Bidwell, 182 U. S. 1,
175-7). Thus the sole question is the validity of the Respondent's claim that, as a federal agent, he cannot be
controlled by a state court. Under the federal Constitution, state courts have jurisdiction concurrently with the
federal courts to protect and enforce rights created by
federal statute. Congress may limit that concurrent jurisdiction by granting exclusive jurisdiction to the federal
courts, but the question is always, "Has it done so?" The
failure of the Congress to take that action as to the rights
created by § 522(c) of the Tariff Act is a clear indication
that its intention was not to limit the ordinary powers of
the state courts to enforce those rights. That such was the

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Federal Reserve Bank of St. Louis

38
intention of the Congress is confirmed by the fact that,
while it had withheld from the federal courts having personal jurisdiction over the Respondent the power to issue
original writs of mandamus, it had already deprived the
Respondent of its immunity from suit as a federal agent
by specifically providing that a Federal Reserve Bank
"shall have power * * * to sue and be sued, complain and
defend in any court of law or equity" (12 11. S. C. § 341).
Congress, by vesting Federal Reserve Banks with the power
"to sue and be sued in any court of law or equity", expressly withdrew and intended to withdraw from Respondent any immunity from suit in the state courts and conferred upon persons so suing it the right to make use of
any appropriate state civil remedy. This necessarily includes mandamus in the instant case. (F. H. A. v. Burr,
309 U. S. 242, 245, 249 Keifer 6 Keifer v. .R. F. C., 306
U. S. 281 Northern Pacific Ry. Co. V. North Dakota, 250
U. S. 135, 152 compare Calf Leather Tanners' Ass'n V.
Morgenthau, 80 F. (2d) 536, cert. den. 297 U. S. 718.)
Under the eccpressio unius rule, Congress, in Section 632
of Title 12, U. S. C. by specifically excepting Federal Reserve banks from attachment or execution before final judgment authorized all other state civil remedies to be applied
against them. F. H. A. v. Bwrr, 309 U. S. 242.
The ordinary jurisdiction of the state courts is not to be
defeated by implicqtion (Galveston, H. 6 S. A. R. Co. v.
Wallace, 223 U. S. 481-490 People Y. Welch, 141 N. Y. 266,
272-3). The failure of Congress by the Tariff Act to vest
power exclusively in federal courts is in effect an affirmation by Congress of the constitutional right of the state
courts to use their ordinary powers and remedies to enforce
those rights. This is confirmed by the fact that Congress
had withheld from all federal courts having jurisdiction
over Respondent the power to issue original writs of mandamus, but Congress had granted power for Respondent to
sue and to be sued in state courts (Title 12, U. S. C. § 341).
Of the federal district courts, only the Supreme Court of

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the District of Columbia has original jurisdiction to issue
mandamus (Kendall V. United States, 12 Pet. 524). Of
course, the Customs Courts have no such power. This
Court will be astute not to construe by implication the
Act so as to preclude the ordinary jurisdiction of the state
courts, especially when any such implication would leave
the Petitioner without any remedy to enforce the rights
created by the Congress, and would subject it and all other
importers to the arbitrary whim of Respondent. (Dissent
of Conway, J., 286 N. Y. at 523-525, R. 50, 51; De Lima V.
Bidwell, 182 U. S. 1, 177; Jones V. Secwrities Commission,
298 U. S. 1, 23-24; Garfield v. Goldsby, 211 U. S. 249, 261262; First National Bank v. Missouri, 263 U. S. 640, 659-60;
Blair v. United States, 6 F. (2d) 484, 486; People v. Welch,
141 N. Y. 266, 272-3; Dudley v. Mayhew,3 N. Y. 9, 15.)

POINT SECOND
The Courts below erred in holding that the
Supreme Court of New York was without jurisdiction
to order respondent to comply with Section 522(c) of
the Tariff Act of 1930, inasmuch as the Supreme
Court, although a state court, can exercise its ordinary
jurisdiction to compel respondent to comply with the
federal law or to cease violation thereof, which, as
the Supreme Law of the land, is also the law of the
State of New York; and this because its order directing respondent so to do would not in any way interfere with respondent's duty or destroy or impair its
official ability to perform its mandatory statutory
function, and so would not encroach in anywise upon
the sovereignty of the federal government.
(A)
Concurrent Jurisdiction of State Courts.
The Supreme Court of New York has jurisdiction, concurrently with the federal courts, to enforce rights created
by federal statutes, including Section 522(c) of the Tariff

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Act of 1930, in the manner commanded by such statutes
where, as here, Congress has not made the jurisdiction of
the federal cowrts exclusive, and has in terms permitted
the Respondent to be sued in the State Courts. In the
exercise of that jurisdiction, the Supreme Court of New
York may grant any appropriate relief afforded by the
New York laws, including an order in the nature of mandamus. For over a century, in substantially every form
of civil action, the courts of New York and of the other
states have exercised personal control over federal statutory
agents acting unlawfully under color of a federal statute
or beyond the scope of their statutory authority.
A state court may exercise this concurrent jurisdiction
to enforce the federal law, even as against a federal agent.
For over one hundred years and in substantially every
form of civil action, the courts of this and other states,
with the continuous approval of this Court, have compelled
federal agents, including collectors of customs, to respond
in damages for their failure to comply with federal statutes
prescribing ther duties. (Bates V. Clark (1877), 95 U. S.
204, 208, 209; United States v. Lee (1882, 106 U. S. 196,
219-20; Teal v. Felton (1848), 1 N. Y. 537, 545-9, aff'd
in 12 How. 284, 291-2, (doctrine reaffirmed in Claflin V.
Houseman (1873), 93 U. S. 130, 142); Gelston V. Hoyt
(1816), 3 Wheat. 246, 334, aff'g 13 Johns R. 141, 151
(trespass against collector of customs); De Lima v. Bickvell
(1900), 182 U. S. 1, 175-177, 179 (assumpsit against collector of customs) ; Scholl v. Newton (1927), 217 App. Div.
171, aff'd 245 N. Y. 576 (conversion against a collector of
customs).)
State courts have been held by this Court to have jurisdiction by mandamus or injunction to require federal agents
to keep within their federal statutory authority and jurisdiction. (Northern Pac. Ry. Co. and Walker D. Hines,
Director General of Railroads v. North Dakota (1918),
250 U. S. 135, 152; First Nat'l Bank v. Union Trust Co.
(1916), 244 U. S. 416.)

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Thus it is clear that not only have state courts the
jurisdiction to give judgments for damages against federal
agents for violation of federal statutory duties and to
require them to keep within the limitations of the authority
and jurisdiction conferred upon them by the Congress, but
also actually to order them to perform duties imposed by
federal statute. (Northern Pacific Ry. Co. v. North. Dakota,
250 U. S. 135, 152 (mandamus); First National Bank V.
Union Trust Co., 244 U. S. 416, (quo warranto); Matter
of Hurley v. Nat'l Bank of Middletown, 252 App. Div. 272,
273 (mandamus); Witnebel v. Loughman,2 Cir., 80 F. (2d)
222, 225, cert. denied 297 U. S. 716 (mandamus); Murray
V. Walker (1913), 156 Ky. 536 (mandamus). Also see:
Gutkrie v. Harkness, 199 U. S. 148 (mandamus); Matter
of Tuttle v. Iron Nat'l Bank, 170 N. Y. 9 (mandamus);
People ex rel. Lorge v. Consolidated Nat'l Bank, 105 App.
Div. 409 (mandamus).)
This doctrine of concurrent jurisdiction was completely
adopted and fully expounded by this Court in Claflin V.
Hauseman, 93 U. S. 130. In that case the objections urged
by Respondent and the grounds given by the Courts below
were urged with great precision by the late Judge William
Henry Arnoux (93 U. S. at 132) and definitely rejected
by this Court, relying upon Houston V. Moore (1820), 5
Wheat. 1, and applying the fundamental principles expressed in the eighty-second article of the Federalist. (93
U. S. at 141, 138 et seq.: The doctrine of the Clafiin case
was completely endorsed and restated in Second Employers'
Liability Cases (1911), 223 U. S. 1, 55-59, and in Minneapolis 41 St. Louis I?. Co. v. Bombolis (1915), 241 U. S.
211, 218, 221-2.) (See also Hines V. Lowrey, 305 U. S.
85, 91.)
This concurrent jurisdiction of state courts in respect
of federal agents is completely confirmed by the Congressional grant of permission and power to sue Respondent
(Title 12, U. S. C. § 341) with all that that implies
(F. H. A. v. Burr, 309 U. S. 242, 245, 249), and by the
tendency of Congress and recent decisions of this Court

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sharply to minimize, if not wholly to abrogate, the immunnity of federal agents acting under federal laws (Keifer 41
Keifer v. R. F. C., 306 TI. S. 38; F. H. A. v. Burr, 309
TI. S. 242).
Until such time as the Congress acts to deprive state
courts of their concurrent jurisdiction to enforce rights
created by acts of the Congress, it is not only the right
but the constitutional duty of the Supreme Court of New
York to protect its citizens from the capricious and unlawful acts of federal agencies (Claflin v. Houseman, 93
U. S., 130, 133-143; Second Employers Liability Cases, 223
U. S., 1, 55-9; Minn. 41 St. Louis RR. Co. v. Bombolis,
241 U. S., 211, 218-221; People v. Welch, 141 N. Y. 266).
Neither the Respondent nor the Government has been able to
point to any provision of law either directly or anpliedly depriving state courts of their ordinary concurrent jurisdiction
to enforce rights created by § 522(c) of the Tariff Act of
1930. Furthermore, where, as with § 522(c), the federal
statute fails to supply a remedy for its breach, the state
court has power to grant such relief as its state laws may
authorize in the manner and to the extent prescribed by its
state laws even though a federal District Court might not
have power to exercise a remedy open to the state court
(St. Louis B. t6 M. Ry. V. Taylor, 266 U. S. 200, 207-8;
First National Bank v. Missouri, 263 U. S. 640, 661; Minn.
41 St. Louis RR. Co. v. Bombolis, 241 U. S., 211, 218.221;
Dudley v. Mayhew, 3 N. Y. 9, 15).
(B)
The reporting of the market rates in compliance with
the tariff act is not and should not be an exception to
the rule of concurrent jurisdiction.
There is no basis in law or reason for making this instance an exception to the general rule that, in the absence
of Congressional restrictions, state courts have jurisdiction
to enforce federal laws and protect rights (wising under

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them, in reason including the power to require federal
agents to perform their statutory duties. This proceeding
is against Respondent only individually to compel it to perform a personal statutory duty. An order directing it to
comply or restraining it from violating that duty would
not interfere with Respondent's official duties but would be
in aid of the clear federal mandate. The description by the
Courts below of the Respondent's incidental acts under
§522(e) of the Tariff Act as "governmental functions" does
not make them an exercise of the sovereign or political
power of the federal government. Those prescribed duties
are plainly mandatory and ministerial and their performance by federal agents should be ordered by state as well as
Federal courts, which latter since Kendall v. United States
(1838), 12 Pet. 524, have exercised such jurisdiction for
over one hundred years; for, otherwise and equally, federal
courts would have no jurisdiction to require state agents
to perform mandatory state so-called "governmental tulletions", which federal courts have compelled state agents to
perform through the past seventy-five years.
Mandamus or an order of that nature, like any other
form of relief, is not directed to a statutory agent, such
as the Respondent, in its "official," but in its "individual"
capacity. It is the accepted remedy to compel a statutory
agent to perform its statutory duties (United States V.
Boutwell, 17 Wall. 604; Warner Valley S. Co. V. Smith,
165 U. S. 28, 32; Pullman Co. v. Groom, 231 U. S. 571,
575-6; Marbury v. Madison, 1 Cranch, 137, 166, 170; Garfield v. Goldsby, 211 U. S. 249, 261-2; Wilbur V. Krushnie,
280 U. S. 306, 318-9; Matter of Lewis v. Carter, 220 N. Y.
8, 18.
This Court, in Northern Pae. Ry. Co. and Walker D.
Hines, Director General of Railroads v. North Dakota, 250
U. S. 135, 152, pointed out that such a suit is not against
the United States when the federal agent is alleged to have
exceeded his authority. The fact that the Respondent may
be a "federal statutory agent," while acting within the scope
of its statutory authority, is quite immaterial. When

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acting outside the scope of his authority he is merely a
trespasser or usurper (Bates v. Clairk, 95 U. S. 204, 209;
United States v. Lee, 106 U. S. 196, 219-20; Western Union
Tel. Co. v. Henderson, 68 Fed. 588, 598).
When state court actions have been met with this objection, courts having generally disposed of the point upon
finding that the state court's usual concurrent jurisdiction
had not been taken away by Congress granting exclusive
jurisdiction over the subject to the federal courts. (Teal
v. Felton, 1 N. Y. 537, aff'd 12 How. 284, 392; People V.
Welch, 141 N. Y. 266, 273, 275; Clafiin v. Houseman, 93
U. S. 130—doctrine reaffirmed Hines v. Lowrey, 305 U. S.
85, 91; First Nat'l Bank v. Missouri, 263 U. S. 640, 656;
First Nat'l Bank v. Union Trust Co., 244 U. S. 416, 427-8.)
The order sought by Petitioner would not interfere with
the performance of the federal agent's official duties and
would not destroy or in any wise impair that agent's authority and efficiency. It would bring about performance of
the non-discretionary statutory duties and thus vindicate
the office and authority and secure efficiency. The Respondent seeks to apply to state courts alone a limitation which
applies to all courts. No court, state or federal, has jurisdiction to "interfere" with the lawful performance by a
federal agent of its federal statutory duties, "governmental"
or otherwise. The test of whether an order directing a federal agent to perform its statutory duties "interferes" is
whether the relief sought would seriously or gravely impair
or destroy the efficiency of the federal agent to discharge
the duties imposed upon it by the federal act or would
encroach upon the sovereignty of the federal government.
(F. H. A. v. Burr, 309 U. S. 242, 245. Compare: National
Bank v. Common/wealth, 9 Wall. 353, 361-2 and First National Bank v. Missouri, applying the same rule to .State
legislation.) An order directing the Respondent merely to
comply with the statute under which it is purporting to
act, in this case Section 522(c), would not fall within this
limitation. Northern Pacific Ry. Co. v. North Dakota, 250
U. S. 135, 152. Such an order would be in aid of, and not

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an interference with, the Respondent's pre-existing personal
statutory duty (Compare: Penn Gas Co. V. Public Service
Comm., 225 N. Y. 397, 406; Western Union Tel. Co. V. Milling Co., 218 U. S. 406, 416-420; Chicago, etc. Ry. Co. V.
Solan, 169 U. S. 133, 137-8; Western Union Tel. Co. V.
James, 162 U. S. 650, 652). The only interference would
be with Respondent's unlawful acts, which are not "official"
and are nullities. (Baird v. Supervisors, 138 N. Y. 95, 115,
116; Matter of Lewis v. Carter, 220 N. Y. 8, 18). Since a
federal court mandamus or injunction order, directing the
Respondent to perform its mandatory ministerial, so-called
"governmental" functions or duties, or restraining it from
transgressing its authority and violating vested rights created by the act, would not be a prohibited "interference"
(Waite v. Macy, 246 U. S. 606, 608-10; Wilbur V. Krushnic,
280 U. S. 306, 319), neither should a state court order in
the same terms constitute such an "interference". In the
words of Chief Justice Marshall in Marbwry V. Madison, 1
Cranch. 137 at page 170:
"It is not by the office of the person to whom the writ
is directed, but the nature of the thing to be done, that
the propriety or impropriety of issuing a mandamus
is to be determined."
The cases heretofore cited or to be cited against this
position involve in each instance attempts to require the
federal agent to do an act either beyond, or in violation of,
his authority and so do not apply. (McClung v. Sillimant,
6 Wheat. 598; Ex parte Shockley, 17 F. (2d) 133; Ohio V.
Thomas, 173 U. S. 276).
If this relief were sought in a federal court having jurisdiction, the direction to the federal agent to perform its
"
governmental functions" would not be a prohibited "interference". By the same reasoning a state court judgment in
the same terms would not be an interference. Respondent
would be protected from any errors of the state court by
its right to appeal to this Court, under Section 237 of the
Judicial Code (28 U. S. C. A. 344, 861).

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In reason it can make no difference whether the direction comes from a federal or a state court, as this Court
has repeatedly declared that they are both courts of a
common country and the laws of the state and the nation
form one system of jurisprudence within the state (Claflin
v. Houseman, 93 U. S. 130, 136-7; Second Employees' Liability Cases, 223 U. S. 1, 55-9; Minneapolis & St. L. R. R.
v. Bombolis, 241 U. S. 211, 221-2; Hines v. Lowrey, 305
U. S. 85, 91). So long as the statutory duties are mandatory and ministerial and the statute prescribes even the
terms of any discretion, these duties are enforcible. So
long as the duty is mandatory and not discretionary it is immaterial that the duties sought to be enforced are so-called
"governmental functions" and the courts have power to determine the correct construction of the statute and to compel
the Respondent to proceed accordingly (Kendall v. United
States, 12 Pet. 524; Waite v. Macy, 246 U. S. 606, affirming
Macy v. Browne, 224 Fed. 359; Merritt v. Welsh, 104 U. S.
694; Garfteld v. Goldsby, 211 U. S. 249, 261-2; People ex rel.
Hilliker v. Pierce, 64 Misc. 627; Lane v. Hoglund, 244 U. S.
174, 37 S. Ct. 558, 61 L. Ed. 1066; Louisville Cement Co. V.
I. C. C. Commission, 246 U. S. 638, 38 S. Ct. 408, 62 Ti. Ed.
914).
As is pointed out in the Petition for Certiorari (supra,
pp. 14, 15), the Respondent's duty in reporting the rates
actually registered by the New York market itself does not
involve a "government function" in the sense of an act of
the sovereign or an exercise of discretion or of political
power.
Again, as pointed out in that Petition (supra, p. 18),
the theory of exclusive governmental functions, if it really
existed, would be mutual but this Court has negated that
theory by holding that federal courts have jurisdiction to
require state officers to perform governmental duties imposed upon them by state laws (Riggs v. Johnson County,
6 Wall. 166, 188 (73 U. S.);
Supervisors v. United States,
4 Wall. 535; Von Hoffman V. City of Quincy, 4 Wall. 535;
U. S. ex rel. Ranger v. New Orleans, 98 U. S. 381; Mobile

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V. Watson, 116 U. S. 289; Marion County Court V. Huidekoper, 134 U. S. 332; Arkansas v. St. Louis-S. F. Ry. Co.,
269 U. S. 172). So, also, it is the established law that the
courts of the United States have power to enjoin state officers from exceeding their statutory authority (Board of
Liquidation v. McComb, 92 U. S. 531, 541; Allen V. Balto.
tt 0. R. H. Co., 114 U. S. 164; Pennoyer V. McConnaughy,
140 U. S. 1, 10, 13; In re Tyler, 149 U. S. 164; Scott V.
Donald, 165 U. S. 107; Reagan V. Farmers L. c T. Co., 154
U. S. 362; Smythe v. Ames, 169 U. S. 466; ex parte Young,
209 U. S. 123, 155, 158-9).
Surely, if the federal courts have jurisdiction to compel
state agents to comply with the state law and would not
"interfere" with state agents by commanding their performance, it must also be true that state courts have like
jurisdiction over federal agents as to execution of federal
statutes.
(C)
The Congress has not granted exclusive jurisdiction over
market rates to any federal authority.
The Congress has not expressly vested exclusive jurisdiction over matters arising under Section 522(c) of the
Tariff Act in the Collectors of Customs, in the Customs
Courts having power to review their decisions or in any
other federal court or authority. It cain/not in reason be
deemed that the Congress has established such exclusive
jurisdiction by implication, inasmuch as neither the Collectors nor the Customs Courts, nor any other federal court
having jurisdiction over Respondent has jurisdiction to
bring it in as a party to the proceedings, or to compel it
by any order or judgment, much less mandamus, to comply
with § 522(c).
The Government has conceded in its briefs below that
there is no direct language in the Tariff Act giving the
federal customs authorities exclusive jurisdiction (At-

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tached Petition, supra 22, 23). The claim is that this authority may be inferred from Sections 514 and 515 of the
Tariff Act of 1930. These sections merely provide that all
decisions of the Collectors, including the legality of all
orders and findings entering into the same as to the rate
and amount of duty chargeable, shall be final and conclusive upon all persons within sixty days thereafter, unless the importer shall file a protest in writing with the
Collector; that, upon the filing of such protest, the Collector shall review his decision within ninety days; that,
if he shall affirm the same, he shall forthwith transmit the
matter to the Customs Court for determination as provided by law; and that the decisions of the Customs Court
are reviewable by appeal to the Court of Customs and
Patent Appeals.
Any inference from these provisions of exclusive jurisdiction is wholly unwarranted. No remedy is provided in terms
by the Tariff Act for any failure on the part of the Respondent correctly to certify to the Secretary of the Treasury, or
of the Customs authorities independently to apply, the
actual buying rate. That rate is actually determined daily
by the market and not by the customs authorities. These
rates automatically registered in the New York market and
directed to be certified daily by the Respondent, while they
are a condition precedent to any use of them by the Collector in liquidating duties, are not any part of the ordinary
customs process regulated by Section 514 (§ 1514, 31
U. S. C). Section 522(c).was a new section, creating new
rights and, by implication, remedies, in addition to the older
Section 514. This legislation, in the absence of specific exclusion, does not deprive the state courts of jurisdiction unless
the remedy provided is adequate. Waite v. Macy, 246 U. S.
606; Calf Leather Tanners Asen. V. Morgenthau, 80 Fed.
(2nd) 536, 542, cert. den. 297 U. S. 718; Blair V. United
States, 6 F. (2d) 484, 486; In re Fassett, 142 U. S. 479, 487;
DeLim a v. Bidwell, 182 U. S. 1, 175-7; Dudley v. Mayhew, 3
N. Y. 9, 15; Oneida Corn. Ltd. v. Oneida Game Trap Co., 168
App. Div. 769, 771, 774-8. Certainly these bodies are not

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vested with any general judicial powers and Respondent
could neither be brought in as a party to their proceedings
nor could such authorities enforce any adequate remedy
such as mandamus.
It is clear that Collectors of Customs and federal courts
having power to review their decisions do not have exclusive jurisdiction over issues arising under the Tariff
Act where they have no power to give adequate relief
(Blair v. U. S., 6 Fed. (2nd) 484, 486). The mere fact
that the Collector might hold that Respondent had not
complied with the law, is not enough, for then the duties
would not be liquidated and Petitioner's deposits at unlawful rates would be unrecoverable. There still would be
no way to compel Respondent to comply with Section
522(c) by certifying the actual market rate, unless the
courts below have jurisdiction to command Respondent,
and the customs authorities and courts have no such power.
Any remedy, other than mandamus, is inadequate and no
bar to the relief sought by Petitioner. (Kendall v. U. S.,
12 Pet. 524; Fremont v. Grippen, 10 Cal. 211 American
Ry. Frog Co. v. Haven, 101 Mass. 398 Ewreka Pipe Line
Co. V. Riggs, 75 W. Va. 353, 83 S. E. 1020, 93 A. L. R.
590-591, anno.) Judge Conway definitely stated it as follows (286 N. Y. at 524, 525, R. 51): "There is no other
adequate remedy than mandamus. Recoverable damages
are inadequate (Kendall v. United States, 12 Pet. at pp.
614, 615). There is no jurisdiction in the customs authorities or courts to consider the question and, if there were,
the power could not be effectively or adequately exercised
by customs authorities or courts, for respondent would not
or could not be a proper party to those proceedings and,
if it were, there exists no power in those customs authorities or courts to command compliance by respondent with
the Tariff Act by certifying the actual market rates."

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(D)
The local law, including substantive remedies, is made
applicable by this Court.
Undoubtedly the right to mandamus is a substantive
right, and the law of New York in its statutes and decisions giving mandamus or an order of its nature to prevent depairtures from mandatory statutory duties by governmental agents or officials is now plainly the local law to
be applied in keeping with this Court's ruling in Erie I?. R.
Co. v. Tompkins, 304 U. S. 64.
It is sufficient under this subdivision to call this Court's
attention to the fact that by its recent ruling in the Erie
R. R. v. Tompkins case it has fully recognized the primacy
of the local or state law, whether expressed in statutes or
decisions of the highest state courts. Within this rule the
right to mandamus, the only remedy which can possibly
furnish petitioner with adequate relief, is a substantive and
substantial right. The power to furnish an appropriate
remedy is a state's right. The State of New York, however,
by the Court of Appeals saying it was bound by the McClung case, disregarding the Clafiin case and, not appreciating the Tompkins case, did not declare this right for
itself, and so withheld mandamus. But this Court has very
recently said: "This Court will review or independently determine all questions on which a federal right is necessarily
dependent. United States v. Ansonia Brass & Copper Co.,
218 U. S. 452, 462-463, 471; Ancient Egyptian Order V.
Michaux, 279 U. S. 737, 744-745; Broad River Power Co. v.
South Carolina, 281 U. S. 537, 540; Pierre v. Louisiana, 306
U. S. 354, 358." (United States, Petitioner v. Pink (February 2, 1942), United States Law Week (Vol. 10, Sec. 4), p.
4173.) Now, in keeping with this Court's recently declared
rule, this Court should say to the New York Supreme Court
that it must determine and apply its own remedies and may
do so in this case by an order in the nature of mandamus,
if upon a hearing the facts and merits are found to warrant it.

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POINT THIRD
McClung v. Silliman, 6 Wheaton 598, relied upon
by the Courts below, is not in point and, to the extent
of any holding, is an affirmation by this Court of the
jurisdiction of the state court in a proper case to
issue mandamus running to a federal agent. As, on
the stipulated facts of record in the case, the act of
May 10, 1800 (2 Stat. 73) was clearly not applicable
to the lands in question and gave Silliman, as register, no authority over them and was not applied in
this case, and as Silliman omitted to obtain a writ of
error, this Court had no appellate jurisdiction under
the 25th Section of the Judiciary Act to pass upon
the question of the Register's immunity from the jurisdiction of the Ohio court. All statements in the
Opinion as to the immunity of a federal agent from
the jurisdiction of a state court were, therefore,
purely obiter.
So far as the plaintiff in error is concerned, he
properly appealed from the judgment on the merits
against him and the affirmance by this Court on the
merits of the judgment of the Ohio State Court,
which had determined preliminarily it had jurisdiction to issue mandamus, necessarily affirmed that jurisdiction. The judgment and holding of the McClung
case was proper and was necessarily and simply to
the effect that no court, state or federal, has jurisdiction to compel a federal agent to exceed or disregard his plain, limited statutory authority.
The Courts below have mistakenly relied upon the McClung case as controlling and conclusive authority on the
unsound theory that this Court had there held that the federal and state governments were mutually exclusive jurisdictions and that the state court had no power to command
or enforce performance by a federal agent of federal mandatory statutory duties, inasmuch as only the creator (the fed-

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eral government) could control the acts of the created (the
federal agent). This mistake is obvious, for any and all
opinions there expressed by Judge Johnson as to the immunity of the federal agent from the order or direction of
the state court of Ohio are purely obiter, for the Government and the federal agent had not appealed from the Ohio
court judgment which also was in their favor and so this
Court under the Judiciary Act was without any power to
review and decide that question of federal immunity. That
there was no intention to so decide that question appears
from the fact that one year prior to the McClung case this
Court, in Houston v. Moore, 5 Wheaton 1, 24 et seq. (with
Judges Johnson and Story dissenting), had squarely decided
that a state court had concurrent jurisdiction to execute and
enforce the military law of the United States and to punish
a violation of it. This jurisdiction of state courts was reaffirmed and reapplied by this Court in Claflin V. Houseman, 93 U. S. 130, 141-2, over the objection of counsel that
the state court was without power even to "aid in enforcing" the federal law (See 93 U. S. at 132). This is made
clear by Conway, .T. (286 N. Y. at 517-522, IL 45-49).
On the part of McClung, the Petitioner for the writ, this
Court had appellate jurisdiction under the Judiciary Act:
Accordingly, that case is then definitely authority for the
rule that the state court had jurisdiction in a proper case to
issue mandamus, inasmuch as, instead of directing the Ohio
state court to dismiss for lack of jurisdiction to issue a
writ to a federal agent, this Court affirmed the judgment
dismissing after trial and on the merits the application for
mandamus. Clearly the further opinion of this Court "that
the said supreme court of the State of Ohio had no authority to issue a mandanvus in this case", refers simply to the
lack of merits "in this case" and not to the inaccurate opinion expressed by the headnote that: "A state court cannot
issue a mandamus to an officer of the United States." All
this is again made clear by Conway, J. (286 N. Y. at 514
et seq., R. 42).

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The McClung Stipulation of Facts was made by stipulation
in the Ohio Court, which is on file with, and made a part of
the records of this Court (286 N. Y. at 515, R. 43), and is
printed as an Appendix to this brief (pp. 57-60, infra).
The pertinent facts contained in the Stipulation of Facts
and some of the Conclusions of law necessarily resulting
therefrom are set out in the dissenting opinion of Conway,
J., in the New York Court of Appeals (286 N. Y. at 516,
517, R. 44, 45) as follows:
"* * * As appears from the stipulation of facts,
prior to McClung's attempt to have the Register enter
his application, a part of the land in question had
been duly sold by a former Register of an earlier land
office in another district and a United States patent
had been issued; another part had also been sold by
the same Register and the purchaser had made full
payment although he had not received his patent; and
the remainder of the land had been sold at private
sale in accordance with the law. Accordingly, no part
of the land McClung was seeking to preempt was a
part of the public domain at the time he made his
application. It had ceased to be within the jurisdiction of the land office and was no longer subject to
entry or to disposition by the land officers. The Register had no power or duty to do the act which McClung sought to force him to perform. (Simmons V.
Wagner, 101 U. S. 260, 261, 262; Borax Consolidated,
Ltd. v. Los Angeles, 296 U. S. 10, 17, 18.) For that
reason no court, State or federal, had power to grant
the relief sought in the McClung case. *'"
In addition, McClung's application, as appears by the record in this Court, was made under the Act of Congress of
May 10, 1800 (2 Stat. 73) governing the sale of Public
Lands in the Northwest Territory prior to the organization
in 1804 of the Zanesville Land Office. The sales of the
different parcels of land had been made either prior to or
in 1803, and a United States Patent had been issued in
1803 to the purchasers of a large part of the lands. McClung's application to the Register Silliman to make his
ltentry
" was made in 1810.

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In addition to the foregoing, the following conclusions
from the stipulated facts are briefly stated, as completely
adequate to overcome and distinguish the McClung case
as authority for the Courts below and for Respondent, and
to confirm its holding as sufficient authority for Petitioner:
(1) That the Act of May 10, 1800 (2 Stat. 73), under
which McClung sought his mandamus, was not applicable
to the question of the Register's immunity as a federal
officer, since the lands in question had been removed from
the jurisdiction of the land office and of the Register by
prior auction sales under the Act and issuance of a patent
or a final certificate of purchase to the several purchasers,
who thus obtained complete legal title which could not be
attacked in an action at law.
(2) McClung, under the Act, had no "right of entry" to
these sold lands.
(3) The Register Silliman had no statutory right or power
to act and had refused to act for lack of such power, and
therefore could not claim that he had exercised any "authority" under, or derived any immunity from an applicable
statute.
(4) As the act was not applicable and was not applied,
no federal question of the Register's immunity thereunder
from the jurisdiction of the Ohio court was properly before this Court which, under the 25th Section of the
Judiciary Act of 1789, had no appellate jurisdiction to
pass upon the immunity of the defendant, as a federal
officer, from the jurisdiction of the 01Ao court (see cases
on page 19 of Petition for certiorari).
(5) As the defendant Silliman failed to take out a writ
of error, he could not raise before this Court the question
of his immunity from the jurisdiction of the Ohio court.
(6) McClung's writ of error, on the other hand, raised
only the question of the validity of the prior sales under

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the act and of the existence or non-existence of a right of
entry on his part, and this Court had appellate jurisdiction under his writ only to pass on those questions.
(7) The prior paid-up purchasers of the lands in question were the real parties in interest, and McClung's mandamus proceeding was fatally defective because of his
failure to include these purchasers, who were the legal
owners of the titles, as parties defendant (Brady v. Work,
263 U. S. 435; New Mexico v. Lane,234 U. S. 58; Lichfield V.
Register and Receiver,9 Wall. 575, 577-8; Garfield v. Goldsby,
211 U. S. 249,261, 262).
Further, as indicated by Mr. Justice Johnson (6 Wheat.
605), McClung had an adequate and immediate remedy
against the patentees for the portion of the lands west of
the Muskingum by action at law in ejectment or for damages, and after the issuance of a patent, by a bill in equity
against the patentees for the land east of the Muskingum.
Marquez v. Frisbie, 191 U. S. 473, 474-6.
(See also pages 5-7 and 16-19 of annexed Petition for
Certiorari; also dissenting opinion of Conway, J., 286 N. Y.
at pages 514-522.)

In Conclusion
The foregoing brief adequately supports the Petition for
Certiorari in respect of the controlling or exclusive ground
given by the Courts below for the dismissal of the Petition,
that is: the lack of jurisdiction in the Supreme Court of New
York to issue an order in the nature of mandamus against
Respondent, The Federal Reserve Bank of New York; and
this brief also shows that there is no power in the customs
authorities and Courts or any other Court having jurisdiction over the Respondent to grant petitioner the needed
relief and to make Respondent a party to its proceedings,
or to render against it any enforceable judgment (286 N. Y.
at 524, 525; R. 50, 51 (fol. 53)) Inasmuch as the Supreme
.
Court of the District of Columbia, while not having jurisdic-

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tion over the Respondent, has been held to have jurisdiction
to mandamus the Secretary of the Treasury, or a Tariff Commission, to comply with a mandatory ministerial provision of
a Tariff Act (Calf Leather Tanners' Ass'n v. Morgenthau, 80
Fed. (2d) 536, cert. den. 297 U. S. 718; United States V. U. S.
Tariff Commission, 6 P. (2d) 491, rev'd in 274 U. S. 106, on
ground that case had become moot), there is no good reason why the New York Supreme Court, under its concurrent jurisdiction, should not have the same power to
mandamus the Respondent.
The other grounds presented by Respondent's objections
in point of law (R. 20 (fol. 28)), call for no consideration
by this Court, as they will be properly disposed of by the
Court of original jurisdiction on any trial, if this Court
reverse and remand.

POINT FOUR
The order and judgment of the Supreme Court of
the State of New York, as confirmed by the judgment
of the Court of Appeals, denying petitioner's application for lack of jurisdiction to issue an order in the
nature of mandamus running to respondent, requiring
compliance with Section 522(c) of the Tariff Act of
1930, should be reversed and the proceedings remanded to the Supreme Court of the State of New
York with the direction to hear and decide the proceedings upon the merits.
Respectfully submitted,
LARKIN, RATHBONE & PERRY,
Attorneys for Petitioner-Appellant.
HERSEY EGGINTON,
GEORGE D. MUMFORD,
of Counsel.

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Appendix
STIPULATION OF FACTS FROM THE RECORD IN THE
SUPREME COURT OF THE UNITED STATES IN
MCCLUNG V. SILLIMAN, 6 WHEATON 598
(State of Ohio, Muskingum County)
SUPREME COURT OCTOBER TERM 1815
Monday 16th inst.
WTI-A-JAM MCCLUNG
VS.
WYLLIS SILLIMAN
Register of land office
Upon a rule to show cause why a mandamus should not
be issued. By consent of the parties this rule is enlarged
till tomorrow morning.—Supreme court October term 1815.
Nineteenth Ins.
On motion for a rule to show cause why a mandamus
should not issue against him to compel him to admit the
entries of the application in the order of the last term made
in this cause. It is agreed between the parties that on the
second of August one thousand and eight hundred and ten
the applicant regularly applied to the defendant to make
entry of his application for entire section number Six Township twelve, Range thirteen, with the fraction number five
same Township and range lying north of said section, also
for entire section number twelve with the fraction number
one north thereof in the township numbered sixteen Range
fourteen, and produced the receivers receipts for the 1/20
part of the purchase money of each. That the defendant
refuses to enter the said application,—first, because the
said lands had been before sold at Marietta except that
part of section number six lying east of the river, prior to

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Appendio
the time of the establishment of the land office of Zanesville
and prior to the erection of the Zanesville district—second,
because if not sold the said tracts had never been offered
at Publick sale in the Zanesville district—third, because
the part of number six lying east of the River had before
the time of the plaintiffs application been offered for sale at
Publick auction at Zanesville and afterwards and before
such application had been sold at private sale according to
law and was sold singly as fraction, and was one of the
sales of fractions made according to the secretary's order,
pursuant to the act of eighteen hundred and four. The parties agree as part of this case the Platt hereto annexed with
all the notes, letters and figures thereon. They further
agree that section twelve and the part of section six lying
west of the river Muskingum, also the part of fraction number five lying west of the said river and the fraction number one, all appearing on the said Platt were sold together
to Increase Mathews and Levi Whipple at the Publick sales
at Marietta in the year eighteen hundred and one, for which
a patent issued to Increase Mathews Levi Whipple & Rufus
Putnam, dated the twenty first day of February one thousand eight hundred and three which Patent hereto annexed
is agreed as part of this case.—They further agree that the
fraction number five appearing on the said Platt was sold
as a fraction united with another tract lying due east of it,
and contained by the lines of the South Military boundary
lines the north of said fraction, each produced east three
hundred and four Poles and a line from these points
parallel with the eastern Boundary of the said fraction
number five was sold at Marietta to John McIntire together
with that part or fraction number one which lies east of
the Muskingum river by the description of east fraction
number one, who has made full payment therefor but has
not received his patent—the last purchase above mentioned
was made in January one thousand eight hundred and
three.—

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Appendix
The Parties further agree, the colours on said Platt to be
true representations of the river Muskingum Licking and
Zanes' Grant which was made in May one thousand seven
hundred and ninety six by a law of that date. The parties
agree that the river aforesaid is a navigable stream. The
sales above stated to have been made at Marietta were returned by the surveyor General to the Zanesville office in
one thousand eight hundred and four, before they proceeded to do business as having been sold at Marietta and
therefore were never offered at Publick sale in the Zanesville District—they further agree that the surveyor General
in executing the surveys of the publick lands Northwest of
the river Ohio and above the mouth of the Kentucky river,
returned the same from the south boundary of the Military
lands appearing on the said Platts down to the Ohio company's purchase on the official platts all along the river in
the manner appearing on the platts annexed in the entire
townships numbered as such intersected by the river and
has divided the townships intersected into entire sections,
crossing the river, shewing the distance of each from its
east and from its west boundary to the river, and distance,
across the river and in the return of the quantity of each
section intersected deducting the area of the river bed and
describing the quantity of each tract on the different sides
of the river in the manner appearing on the said Platt
annexed which so far as the same goes is a true copy from
the surveyor Generals record. The parties further agree
that the sale of the property contained in the said patent
made part of this case was made in Marietta in one entire
Sale under the direction of the Surveyor General and the
Governor of the Territory—they further agree that the section four being the tract before described lying east of the
said fraction number five lies on the North side of the
Township containing it, and is bounded on the north by the
south bounds of the United States Military tract. They

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Appendio
agree that this agreed case shall not be considered on the
defendants part as a waiver of the question of Jurisdiction,
and that the case be now considered as on a motion for a
preemptory Mandamus waiving preliminary proceedings.
The parties further agree, that altho the law establishing
the Zanesville district passed in March one thousand eight
hundred and three, an office was not opened there until the
twenty first day of May one thousand eight hundred and
four.—And they lastly agree that all the official Platts
and notes thereon or accompanying the platts now filed in
the office of the treasury Department of the seventh Ranges
and of the lands northwest of the river Ohio and above
the mouth of Kentucky river be considered as parts of this
case and to be referred to, by either party, in the Supreme
court of the United States if this case shall be taken to
that court without being copied into the record of this court.

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.4310 249

Press of Fremont Payne, Inc.

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Full text of Records of the Federal Reserve System, Record Group 82 : Suits Against FR Banks: Schmoll Armand Inc. vs. FR Bank New York (Pocket), Box 591, Folder 5

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